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Beauty and fashion brands struggle to keep up with phenomenal growth of jewellery
The jewellery industry is having its moment. The global jewellery market is expected to reach US$480.5 billion by 2025, says California-based Grand View Research. The world’s top 100 luxury goods companies earned total revenue of US$247 billion in the 2017 financial year, up from US$217 billion in the previous cycle, according to the 2019 edition of Global Powers of Luxury Goods by Deloitte. A powerful engine behind this US$30 billion growth is the jewellery industry, which scored a 7 per cent increase.
It outperformed the beauty and fashion sectors, such as handbags and apparel, which saw a 1 per cent drop in revenue, as shown in Bain & Company’s study on worldwide luxury goods sales in 2018.
Switzerland-based Richemont – owner of Cartier, Van Cleef & Arpels, and Chloé – recovered from a 3.9 per cent decline in 2017 and reversed it with 3.1 per cent growth in 2018.
This recovery was ascribed to 9 per cent growth by its jewellery brands, which contributed a 58.9 per cent share of Richemont’s luxury sales.
French luxury conglomerate LVMH owns high-fashion brands from Louis Vuitton to Dior, as well as jewellery and watch labels like Chaumet and Bulgari.
The success of its watch and jewellery divisions in 2018 – despite accounting for only 15.3 per cent of LVMH’s overall sales – was one of the key factors handing it the crown in the luxury market, and boosting its 17.2 per cent year-on-year sales growth from 2017.
As fashion brands struggle to grow, what are the factors keeping these century-old fancy jewellers afloat? Jean-Marc Mansvelt, CEO of Chaumet, believes heritage brands have a tremendous advantage because in jewellery, longevity is crucial and brings value; investment in jewellery boosts returns for the next generation.