T he Italian gold jewellery industry has not recovered as yet from the plunge in demand that its primary market, the United States witnessed. While statistics show that Italian gold jewellery exports over the first two months of 2010 registered a 9 per cent increase in value year-on-year over the same period, this is attributed mainly to the rise in the price of gold. In volume terms, exports fell 5 per cent year on year during the same period. Overall, the consumption of Italian gold jewellery dropped more than 50 per cent over the past decade to 41 tonnes in 2009.

Now, with the Greek sovereign debt crisis and the prospect of more European nations going the same way,

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the outlook for the world’s gem and jewellery industry and particularly Italy’s fine jewellery fabrication industry – is even more daunting, to say the least. Thus, the Vicenzaoro Charm trade show, which ran from May 22 to 26, was really more of a determined statement of intent in a tough environment than an actual indicator of any recovery in global consumption. But Roberto Ditri, the trade show’s chairman, embodies the determination of the Italian industry to persevere against the odds.

In his remarks at the Charm show’s opening ceremony, he first acknowledged the magnitude of the situation. “The uncertainty of the world economy; dwindling consumption,

Italian Industry Sees Opportunity In ChinaWhile the strength of the US dollar against a sliding euro has made Italian exports much more competitive in markets like the US, competition from production centres like China and India is fierce. In a surprising twist, the Chinese market offers the Italian jewellery industry a great opportunity. Shanoo Bijlani reports from Vicenza’s Charm trade fair.

Vicenzaoro Charm

Roberto Ditri

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the concerns linked to the future of the single currency; the instability of some of the Eurozone economies as well as the continual shocks in the financial market; and the continual oscillations of the price of gold as a sheltered asset, are worrisome factors,” he said.

“We are facing a challenge which must be fought using appropriate strategies,” he added. “The first timid signals of change, which I would not call a recovery, are too weak and unstable to be able to affirm that we are out of the tunnel. But these signals have given us enthusiasm and renewed our determination to be winners.”

Ditri then went on to outline the opportunities. “The Chinese market is in expansion mode and is a very broad market arena, not just limited to Beijing and Shanghai. And the market has more similarities to the European market than might be thought.” Ditri said the Fiera di Vicenza, the organiser of Vicenza’s several jewellery shows, has launched specific initiatives in China, with Vicenzaoro and The World Gold Council (WGC) Gold Expressions

jewellery contest taking part in the Shanghai Expo. But there are other issues, particularly high tariff barriers, complicating the expansion of the Italian industry into new markets like China, Russia and India.

There was a measure of optimism at the Charm show, however, as it is evident that the United States economy is indeed on the mend and consumer sentiment there is improving. While the 10,000 or so visitors to the show were predominantly Italian and European, there were serious overseas buyers who checked out what the 1,400 exhibitors had on offer for five days. Italian exports, which amounted to €3.7 billion in 2009, grew 9.2 per cent in the first quarter of this year over last year’s figures for the same period. That was reason enough to cheer. The weak euro is also making Italian exports much more competitive in international markets, but this is tempered by the fact that other producing centres like China and India, with much lower labour costs, are now aggressively competing in the same marketplace.

The first timid signals of change, which I would not call a recovery, are too weak and unstable to be able to affirm that we are out of the tunnel. But these signals have given us enthusiasm and renewed our determination to be winners

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Managing changeOverall, Italian manufacturers

continued with their strategy of using more open designs and hollow tubing to generate a substantial look with significantly reduced gold content. One happy voice at the fair was Gino Diluca of Diluca, who said that “business was finally moving for the firm.” The company specialises in hand-painted cameos in silver and gold, and also produces coral jewellery for markets

in Europe, the US and Japan. Diluca noted, “The future of jewellery lies in being associated with fashion and accessories.”

Compared to last year, Bonato saw a 50 per cent improvement in sales. Franco Minonne, the company’s spokesperson, attributed the positive results to doing homework. “We travelled extensively in our old established markets – Lebanon, the US, and Russia – to tap new customers,

Overall, Italian manufacturers continued with their strategy of using more open designs and hollow tubing to generate a substantial look with significantly reduced gold content

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who have deep pockets, and who want something new and fresh. We picked up clients from trade fairs too. The strategy paid off. We are also aware that India is the best market currently, but the 14 per cent import duty on gold jewellery is a killer,” he commented.

Fourth generation jeweller Micheletto offers jewellery made of gold, wood, leather, diamonds and gemstones. “Although we sell traditional jewellery, the recession has forced us to be fashion-oriented and innovative in our use of materials in order to help keep our costs under control. Before the recession our labour cost per piece was €8 to €40 per gram, but post-recession, the cost per piece has reduced to between €3 and €20 as there is less gold to fabricate. Business wise, like most others, January was a healthy month. But this is a dull period in terms of sales. We now sell mostly in Europe and Italy. We gave up on the US market three years ago as it was no longer lucrative to sell there.”

Companies that mixed cost-effectiveness and fashion element got better results at the fair. Calgaro’s Asia

collection in silver and satin threads was well received. Starting from €150 to €800, the collection mixed and matched different materials to keep costs under control.

Mattia Cielo, who sells through stores in the US, Hong Kong, Russia, Ukraine, Dubai, Southern France, Germany and China. He revealed, “Conservative markets are not used to groundbreaking products, and although I have some clients in Italy, my line is for those who dare to be different. That is the complication. We are looking for partners the world over, including India. We want to connect with the new generation that is IT - and mobile-enabled and is on the move. I want to cater to the second generation of luxury buyers, who are already at ease with the best brands and are already familiar with Cartier, Chopard and Van Cleef.”

Annamaria Cammilli’s executive Christina Jacomelli said that they had introduced lines this year to suit the pockets of different-end consumers. “Our 2010 collections are meant to

Although we sell traditional jewellery, the recession has forced us to be fashion-oriented and innovative in our use of materials in order to help keep our costs under control

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appeal to the new-age women. The economic crisis had to be fought back without compromising on quality and our identity, but new needs and situations forced us to develop new ideas. Our normal range (final retail price) is between €1,000 and €5,000, and our one-off pieces are 25 per cent more than the normal range. Today, though, our new collections range between €600 and €900.”

Cammilli sells through 400 retail stores in Italy; has established markets in Russia, the Middle East and the Far East. The firm has four mono brand outlets in China. “We are shortly planning to open a flagship store in Italy,” says Jacomelli. “For the first time we have introduced new elements like charms and fruits depicted by smoky quartz, garnets, amethyst, and pietersite.”

Although Utopia did not generate much buyer interest at Charm, Anna Gaia of Utopia revealed that 2010 had so far been a much better year for the company. Market sentiments were better. Gaia stated, “The first two months were good for our US market. That bodes well for business especially

for our high-end jewellery and one-of-a-kind pieces which are in demand. We export our jewellery to the Russian republics and Eastern Europe as they have a big culture of pearls. The Middle East market is very slow and is not moving the way we would like it. But sales in the Italian region are suffering the most. We need to do some serious rethinking about our product lines for this market.”

Fabio Bertacche, sales manager of Criso Italia, noted that their 25-year-old company produces 18- and 14-karat handcrafted and machine-made jewellery and sold 60 per cent of its merchandise in Italy; the rest was exported to the US, Russia, and Hong Kong. “That was until 2008,” said Bertacche. “Then everything collapsed. Post-recession, we are trying to reinvent ourselves and plan to sell as a brand. Unbranded gold jewellery is in for a rough patch and companies like us lose out in the race as we are not recognised. It is becoming increasingly difficult to sell good quality goods which are not branded.”

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Okay for IndiansWait and watch was the motto

of the Indian pavilion at Charm this year; most only aimed at meeting their regular clients. Nine Jewellery, a company that specialises in pavé and rose cut diamond jewellery and sells in Italy, Greece, Eastern Europe and Bulgaria, was exhibiting for the second time at Charm. Owner Rajiv Nigotiya said, “Our first outing was last year, when the recession was at its worst. We learnt a lot of lessons and have returned better for them.” The company had product on offer with reduced gold content.

Santi Choudhary, owner of Royal Gems and Art of Jaipur, who has

been exhibiting for more than 20 years, sounded optimistic. “The crisis is slowly ebbing away,” he said, “and we enjoy the patronage of our old customers.” Although his clients come from

France, Spain, Austria and Italy, Choudhary said that the company

does get a few new buyers at Charm. He noted that the Europeans love studded jewellery and the trend now is for multi sapphires in pinks and yellows.

Many exhibitors noted that only a handful of their clients had pre-booked their appointments. Laxmi Prasad Sharma, senior sales officer of Derewala, that makes silver-studded and filigree jewellery and markets mainly to Italy, Germany, and Denmark, said, “We have better expectations of the Las Vegas show. Charm will not generate much buyer interest.”

Navindra Goyal, director of the European office of Dwarkas, also said he didn’t expect much from the Charm show this year. Goyal however, added, “But the European market is getting better. We have lowered our price points by more than half to suit market conditions, and have developed lines using citrines, amethysts, and aquamarines. Thus, a pair of earrings costing between €1,500 and €2,000 earlier now costs about €600. In our higher range we have more of multi-coloured necklace sets with emeralds, rubies and sapphires. Because we have done our home work, we were better placed in terms of sales than last year.”

Suresh Gems said that the company saw a fair amount of interest in emeralds and its low-priced goods

But the European market is getting better. We have lowered our price points by more than half to suit market conditions, and have developed lines using citrines, amethysts, and aquamarines

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costing round €1,500. He admitted, however, that the market for mid-ticket products (€4000 to €5000) had dried up. “We came to Charm only to meet our old customers from Italy, Spain, France and Greece,” said Sudhir Rawat, a co-owner of the company.

Rama Jewellers, too, agreed that although the market for high priced goods was not affected, their mid- and low-end goods had no takers. “We do get a couple of new customers in every edition of Charm, but this time

we had no such luck,” said a company spokesperson. The company, which sells jewellery ranging from €400 all the way to €60,000, has long since stopped exporting to the US, but have a loyal set of clients in France, Spain, Italy, Switzerland, and Germany.

Indian manufacturers selling loose diamonds didn’t fare well. Most had a quiet show. Piqué goods and SI1 saw some movement. First-time exhibitor Dharm Diam stated that there was demand for 2 pointers to 1 carat

Many affected Italian gold jewellery mass-manufacturing companies

saw their fortunes turn for the better when they moved from making non-branded jewellery to designer products sold under the label of the World Gold Council’s Gold Expressions line. Solitaire met some of these companies at the Charm fair.

Esssenza started their association with Gold Expressions about four years ago. “Using the Gold Expressions platform, we introduced a new line of branded jewellery, and the move immediately yielded results. It enabled us to enter a new market like China easily as we could ride on the trust factor developed by the WGC’s popular gold jewellery brand.” Esssenza started manufacturing basic merchandise like pendants, rings and links in 18-karat in 1987. The firm exported to the US, Turkey, Spain the Middle East. They also sold to Russia and East Europe.

The market is picking up from the gloomy session of last year, and the times are interesting. The US and Dubai markets have also begun to hum again. Some European markets are doing better

the Branding Lift – Gold expressions

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Today, post-recession, the firm makes large but light-weight jewellery and is known for its youthful designs and good quality. Sara Basso, one of the firm’s co-owners, reveals, “The recession has affected us. We do get orders but they are often not honoured. In pre-recession times, buyers booked at least 100 pieces per order, but now, not more than 10 are booked. As a result, our manufacturing is impacted. But we are not complaining. We are tapping new markets.”

Likewise, Vendorafa Lombardi based out of Valenza, has been making handcrafted jewellery for the last 50 years and invests heavily in research and quality systems. Maintaining the same philosophy since then, the firm uses modern technology and exports about 70 per cent of its jewellery to Europe, Japan and the US.

Famous for their engraving, embossing and hammering techniques, the firm presents traditional designs in modern ways. They have been enjoying a six-year-long tradition of creativity and association with the WGC. “Designing for Gold Expressions helps us propagate Italian creativity to the world. The Italian love for gold

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diamonds in colours D to H. “Our outlook for the fair was not that great, but we have done fine.”

Speaking to Solitaire, Daniela Invernizzi, Italian representative of the World Gold Council, said, “The market is picking up from the gloomy session of last year, and the times are interesting. The US and Dubai markets have also begun to hum again. Some European markets are doing better. International gold prices have been very strong, coupled with the fact that

the industry seems to be in a better condition than before.” From the point of view of Italian gold jewellery exports, she informed, “the best export market is still Dubai followed by Europe, China and the US.”

is great; we are very emotional about it and creativity is the essence of the soul of gold,” says Augusto Ungarelli of Vendorafa. The firm makes 18-karat gold jewellery in geometric shapes and retails jewellery ranging between €100 and €30,000.

Vendorafa this year introduced jewellery made of sterling silver, plated with rose gold and set with brown diamonds, for the American market. “Silver is getting increasingly popular in the US,” says Ungarelli. “The global economic fallout hit us terribly last year. This year though, we are seeing some signs of recovery, and thus are more confident about the market. We had to review our systems; bring out new products; and reinforce our internal manufacturing processes. And though we retained all our 80 in-house artisans, we had to halve the number of our 70-odd freelance artisans. Although we are working with large volumes and negative spaces, we want to maintain our integrity at any cost. We are looking

at newer markets like India. There is a possibility of touching base with India in the near future.”

D’Orica’s Giovanni Gnoato, revealed that for the last 20 years, they have been churning out bread-and-butter gold jewellery items like chains, tubes, beads in 22-, 18-,14- and 9 karat depending on the requirements of customers. It was only five years ago that the company got wind under its wings when they began to participate in Gold Expressions and created high-end jewellery. “Our primary market all along was Italy and some other parts of Europe. But now our products have found favour in Turkey, the Far East, and the Middle East via wholesalers. In fact, the Far Eastern market is picking up faster than we expected. Being part of Gold Expressions has given us a kind of trustworthy certification which helps us gain new customers.”

Treemee was founded in 1982 and is well known for its designer gold

jewellery of handcrafted 18-karat chains, and chain links. The firm’s skills lie in manufacturing tubes, brackets, gold sheets, hollow wires etc. Five years ago, the company launched Dall’Avo, their branded jewellery for Gold Expressions. Sivia Navini of Treemee states, “The first half of 2009 was very tough, but then our old clients started to buy again.”

The WGC’s Invernizzi said that a lot of research goes into creating designer pieces. This year the WGC combined the insights received from the consumers and used trends predicted by Future Concept Lab and guest designer Beatriz Biagi. Invernizzi said, “We give directions to designers to use gold in different forms. We explain upcoming trends from a socio-cultural viewpoint. It is up to them to mould these inputs to their price points. And what they have come up with is substantial jewellery that is affordable.”