The jeweller Garrard, whose pieces typically range from US$100,000 to $500,000 in price, is looking to double its sales in the Middle East this year.
The company that designed the late Princess Diana’s engagement ring is looking to the Middle East to drive its next growth chapter. And it is not alone among the big global jewellery brands that have identified the region’s taste for luxury and rising income levels as a reason to expand from Doha to Dubai.
A desire for large, expensive jewellery pieces has helped the UK-based jeweller Garrard grow sales by more than 150 per cent across the Middle East and the company is looking to double its sales this year. It joins other groups including Tiffany and India’s Kalyan Jewellers that have added stores regionwide.
“The Middle East is really huge for us,” said Eric Deardorff, the chief executive at Garrard. “The Middle Eastern client generally seems to want larger pieces, meaning in some of our markets a necklace that has a single strand of diamonds is an exceptional piece but that would not work here. Generally the jewellery needs to be much fuller,” he said.
Customers here are also more likely to buy sets of jewellery and pieces that match, rather than just one item of jewellery, further helping to drive this growth.
Despite the long legacy of pearl-diving in the region, it is the diamonds and other precious stones like sapphires, rubies and emeralds that are the big sellers. Typically, Garrard’s pieces range from $100,000 to $500,000.
The company has partnered with the UAE’s Damas, to sell its fine jewellery across the country. It also has retail presence in Lebanon, Saudi Arabia, Qatar, Morocco and Turkey.
“Over the last two years we have been in rapid methodical global growth phase, which includes Harrods, key franchise partners and becoming very visible in important markets,” said Mr Deardorff.
These important markets also include Far East Asia, and Eastern Europe, whose customers have a “voracious appetite for beautiful jewellery”, according to Mr Deardorff.
“Our sales were up 150 per cent from 2012 to 2013, but it is starting to get tough to get the same level of growth. We expect to double this year, reason being our new partners in the last two years are experiencing sell through,” he added.
The company hopes to branch out of its current retail presence with partners as they operate their own standalone stores. The rapid growth of new luxury hotels across the emirate is also presenting an opportunity for jewellers. Damas is set to open a branch in Dubai’s Zabeel Saray hotel soon.
The diamond and jewellery market is experiencing greater competition from Chinese and Turkish traders, who are offering prices significantly cheaper than the older European players. There have also been acquisitions of Italian high-end brands in recent years, a trend that could touch other European jewellers. Bulgari was snapped up by the French luxury group LVMH for €3.7 billion (Dh18.53bn) in 2011; Pomellato, another Italian brand, was bought by France’s Kering; and the private equity firm Clessidra took control of Buccellati. But Mr Deardorff refused to comment on whether Garrard is up for sale or an acquisition any time soon. He is, however, confident that the older players can maintain their hold in the market despite the competition coming from the East.
“There are always new competitors coming up, there has to be 1,000 jewellers at Basel [Diamond Show]. Somehow a range of jewellers are able to have a global presence and still grow and make money and we are hoping that continues in the foreseeable future,” he said.
Dubai has a long-standing reputation as one of the top destinations for the gold and diamond trade. From the year to November 2013, Dubai Diamond Exchange experienced an 11 per cent rise in the trade volume of rough diamonds, reaching a vale of US$11bn.
The top trading countries were the UK, Belgium, Hong Kong, India and Angola. According to MediaCom, retail sales of luxury jewellery grew from Dh2.48bn in 2012 to Dh2.82bn last year in the UAE.
Dubai Duty Free recorded sales of Dh613million for gold in 2013, a rise of 5 per cent, while sales of watches grew 16 per cent to Dh459m.
“The global diamond trade is continually evolving and Dubai continues to play the central role in this evolution by creating the ideal marketplace for diamantaires to trade with confidence,” said Ahmed bin Sulayem, executive chairman of the Dubai Multi Commodities Centre (DMCC). “The relocation of DTC [Dubai Trading Centre] from the UK to Africa further signals the inevitable shift in the flow of trade form North to South and West to East. At DMCC we have been preparing for this shift and are more than ready to take on the opportunities this presents.”
Up until 2007, Garrard was the official jeweller to the UK’s royal household, a position it had held for 160 years. The company was replaced with a family run business after Buckingham Palace decided it was “time for a change”. Garrard designed Princess Diana’s sapphire engagement ring, now sitting on the finger of Kate Middleton.