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Tue, Apr 27, 2010
The Business Times
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Gem of an idea
by Melissa Lwee

IT used to be that unless one was prepared to fork out exorbitant amounts of money for heirloom-type jewellery pieces, there were certain shops you would never even dare set foot into.

Things change. Local boutique jewellers - once known for exclusive designs and premium prices - are discovering the potential of more affordable lines. By offering a wider range of entry-level jewellery, priced within the accessible $800 to $10,000 price bracket, these jewellers have their customer base widen by an encouraging margin.

DeFred Jewellers (at Mandarin Gallery) is one which started to roll out a more affordable line (between $1,000 and $10,000) about four years ago.

'It was the 2003 economic crisis that gave us this idea,' reveals DeFred managing director Sharel Ho, estimating that only 20 per cent of jewellery consumers actually still purchase high-end jewellery. 'The crisis had really affected the luxury market and many people had cut down on their spending budgets. We knew then that we needed to change our business strategy.

'While we still needed to maintain the quality of the jewellery that we produce, we saw no need to focus only on the big jewels. We could focus more on the design of the jewellery and use smaller stones in order to make them more affordable.

'Offering this range of jewellery even helped us to survive the most recent economic crisis.'

She reveals that such pieces of jewellery have an added bonus: 'They are more suitable for everyday wear and to the office and they're great because you don't have to worry about wearing them out unlike the big pieces of jewellery!'

Rosalind Lim, executive director of Forever Jewels (that runs Cupid at Orchard Central and March at Clifford Centre), agrees: 'A lot of women - and men alike - are no longer just looking for that one piece of jewellery to last a lifetime, they are looking for items that they can wear everyday as a part of their fashion repertoire. But if you're going to wear it everyday, you're not going to want to wear something that costs $100,000.

'Entry-level jewellery has become very important for many boutique jewellers, especially in the past two or three years. While we only used to produce affordable pieces as special promotions for occasions like Valentine's Day and Mother's Day, now they encompass at least a third of our stores' portfolio.'

According to Ms Lim, this growing trend has forced boutique jewellers to be more creative, especially with the proliferation of costume jewellery flooding the market. 'There is a need to produce more design-oriented jewellery that can compete with the jewellery coming out of fashion houses,' she observes.

'This is so that we can offer a value proposition where for slightly more money, they can get a fashionable piece of jewellery but made using real gold and stones and not crystals. 'For example, to save costs, we play with designs to incorporate less pricey stones like garnets, tourmalines, peridots and black diamonds. The latter were not very popular in the past but have become very fashionable and coveted in the last few years. These stones add a new exciting dimension to the jewellery which customers like.'

Offering entry-level jewellery not only caters to desires of consumers today, it has also provided a way for boutique retailers to expand their businesses.

Loang & Noi at Paragon Shopping Centre, once known mainly for one-off, extraordinary pieces, has successfully grown its customer base with a completely new line of jewellery. Called 'MiniMe', the collection (priced from $380) launched last November was Loang & Noi's 'pret a porter' answer to jewellery.

'The 'MiniMe' collection was launched at our 16th anniversary celebrations,' reveals co-founder Francis Foo. 'Because the MiniMe idea was conceived in the midst of an economic crisis, we decided to create a collection that was accessible but at the same time still distinctly Loang & Noi.'

As it turned out, the collection was not only a huge hit, but proved to be an inroad into new customer bases as well. 'It has helped us to grow our business,' says Mr Foo. 'Customers are no longer just coming in to buy the special one-off pieces, they're also coming in to buy the MiniMe jewellery as gifts for other people. We've also noticed a lot of younger customers in their teens or early 20s coming in to buy the MiniMe jewellery which is great because they will grow into future Loang & Noi customers.

'MiniMe has become so successful that it has provided new business opportunities for us. We are now looking to open up MiniMe corners at quality department stores, something we couldn't do effectively with our bespoke jewellery in the past.'

At DeFred, the success of their daily-wear jewellery inspired them to start a new business in the form of a diffusion line called Just Diamonds by DeFred (only sold at Prosper House and not at Mandarin Gallery).

The business works on a franchise model where for $5,000 or $10,000, buyers not only get to claim back a piece of jewellery for that value, he/she also gets to redeem points (that convert to cash) whenever he/she refers a friend back to Just Diamonds.

'As it takes a huge amount of capital to start a diamond business, Just Diamonds' business model allows everyone to start their own form of diamond business without having to come out with that huge amount of capital,' says Mrs Ho. The business has proven so popular that hundreds of people have signed up in a mere six months.

'We could never have done this if we only sold big, high-end jewellery.'

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This article was first published in The Business Times.

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