by Elisa Anniss
For Valery Demure, the jewellery entrepreneur, consignment is a big subject. “Sustainability and sweatshops are talked about with passion, but nobody dares to talk about how jewellery designers struggle with today’s retailer demands,” says London-based Ms Demure.
Her agency represents leading names in designer fine jewellery, including Fernando Jorge, Delfina Delettrez and Monique Péan.
In recent years, luxury e-tailers, department stores and multi-brand boutiques around the world have become eager for new, fine jewellery brands, often describing the fresh ideas, novel techniques and unexpected materials as a retail “sweet spot”.
And yet some have also brought with them crippling practices such as return to vendor (the retailer buys the piece, but if unsold, it is returned to the jeweller and the retailer is reimbursed or receives a credit). And consignment — the most common practice of all.
Selling on consignment, where the retailer pays the wholesale price after the sale, returning any unsold pieces, has become a highly contentious matter for jewellery designers.
For unless the designer is independently wealthy, running an established business where cash flow is no longer an issue, or cushioned by start-up money, it is the independent jeweller, not the retailer, who may crumble under financial strain. Melanie Georgacopoulos used to run a fine fashion jewellery label. Now head designer at Tasaki, a Japanese jeweller, she describes how common retail practices left her disheartened. She became irritated that most retailers did not appreciate consignment and did not offer anything in return, such as media coverage.
“I now appreciate that consignment is and should be part of an order, as a small percentage, because it enables stores to stock more pieces from a small designer, hence more visibility for the designer and less investment risk for the store,” she says. “But I think that if the stores aren’t buying, they simply don’t put that much effort into selling.”
Sally Leonard, a jeweller-turned-business consultant who works for the London enterprise agency Centa, notes: “At the moment, everyone wants to cut costs and shops know that many designers are desperate. I tell my clients they have to make some tough decisions, to treat stockists as marketing to help build their profile and that selling to five to 10 stores is more than enough to drive sales.
“They can hold out for an order or decide they can afford to consign. And it is worth it, especially if it is an organised consignment to a store that fulfils its invoices and pays every month. But in the end, the most profitable transaction is to sell to the client directly.”
Gannon Brousseau, the director of Couture, the jewellery trade show, says consignment is a difficult situation for the industry and a concern of his. “Designers invest a substantial amount of money in their collections and want to know their retail partners are investing in them too. I wouldn’t be surprised if there is a shift in the coming years. Quite frankly, there has to be.
“With online becoming more important to designers’ success, I believe [that increasingly] they will pick their partners more carefully and only work with those who truly support and believe in their brand.
They may choose to consign with some, but it will be a mutually beneficial relationship where both parties are investing in one another’s success. Conventional distribution is changing and will continue to in the years ahead.”
For Emma Madden, of London jewellers Shimell & Madden which launched at Dover Street Market in March, consignment has always been the norm.
“I see it from both sides. Usually, retailers support you by using their PR to help you grow and then once you are selling you are in a better position to negotiate,” says Ms Madden.
Since it is the designers who set prices, she knows of some who quote higher wholesale prices when asked for sale or return. “It [consignment] allows shops to carry more stock and makers to exchange stock.”
Ileana Makri, who has opened a store in Athens, selling her own label and pieces by other designers, believes “the fair thing to do is to buy a portion and ask for another portion on consignment”.
For her collection, she buys the gold and diamonds and pays for manufacturing in advance. It takes 90 days at least to recoup these costs and that is selling wholesale. “If it’s all consignment, then you limit yourself to the bigger names that can afford to do it and that’s not what I am looking for, ” she says.
Ms Demure cites Liberty in London, Ylang 23 in Dallas and White Bird, Le Bon Marché and Montaigne Market in Paris as some of the retailers that buy into jewellers’ collections.
“Consignment should not be taken for granted, but be part of a negotiation process, so that retailers share the risk with designers and are rewarded with consignment stock to elevate and complete their selection,” says Ms Demure.
But Ms Leonard goes further. “In my opinion, if a retailer knows it can sell a piece, then there’s no justification at all for not buying.”