Day: September 16, 2013
Gregory turns 45
Further reading:
Shiels – still ‘no Hoo-Haa’
The men behind one of Australia’s most successful jewellery retail chains reveal the secrets to their success – and their expansion plans.
With 15 stores in South Australia, 16 stores in WA, eight stores in Queensland and plans to expand into Victoria and NSW in the year ahead, Shiels Jewellers is an indisputable success.
However, despite its obvious popularity with consumers, the company and its founders have not always won the praise of their jewellery industry counterparts for their success or the marketing tactics that have helped “revolutionise’ the local jewellery retail landscape.
Nonetheless Shiels chairman Albert Bensimon, who started his retail empire with the purchase of a small jewellery and gift store in Adelaide’s city centre in 1977, is proud to say that the company was the one to introduce “genuine discounting” in the Australian jewellery industry.
Armed with a degree in marketing and experience selling pharmaceuticals and computer software, Albert and his wife Nyra bought the store, which was established by Jack Shiels in 1945, from his widow in 1977.
The decision to buy an established jewellery store rather than open a new business was purely strategic.
“I bought the store so I could advertise that I had been in business 30 years,” he explains.
“The jewellery business is largely based on trust and such trust can take a long time to build so I thought it would be better to buy an existing business than start a new one – that’s why the business is called ‘Shiels’ and not ‘Bensimon’s’.”
Discount daze
“Building on that trust”, Albert gradually replaced the store’s giftware with jewellery, and became “the first jeweller in Australia to discount diamonds and gold in a meaningful way” with his infamous advertising slogan ‘No Hoo-Haa’.
“We weren’t the first in the market but we were first in the market to discount and that’s what we quickly became renowned for,” he says.
“Jewellery stores didn’t discount in those days but I bought one carat diamonds that were selling for $3000 or $4000 in other stores and sold them for $2500 making $500 instead of $1500 in profit.
“Everyone {other jewellery retailers} was waiting for me to go broke but I didn’t – I was in fact making a lot of money due to the volume of sales.”
Spurred on by his discounting success, Albert then became the “first jeweller in Australia to sell gold by the gram”.
“Everyone was selling gold jewellery by the piece in a little plastic bag and I decided it should be sold by weight so people knew what value they were getting,” he says.
“We then became known for selling gold and diamonds.”
Suburban dreams
Albert then decided to expand his successful business by opening stores in the suburbs.
“I had travelled and seen what happened to city retailers in other countries, particularly Canada where I had worked for Hoffman Laroche in the pharmaceutical field,” he says.
“Montreal, Toronto and other major cities took a real bashing as the suburbs and malls slowly took over. It got so bad that you couldn’t buy a nail or screw in the city.
“I thought retailers in Australia would move to the suburbs too. It took a little longer than I thought but it did happen.”
Albert opened his first suburban store in Marion, the Westfield Group’s first shopping centre in South Australia and then “basically went wherever Westfield went” until he had about 10 stores.
Albert believes his decision to expand into the suburbs was critical to his success.
“A lot of my competitors didn’t recognise the potential of the suburbs,” he says, adding that many were held back by a “lack of trust” and a good management system.
“Most people have difficulty trusting anyone with high priced items or cash. They are scared to have people other than themselves looking after half a million dollars in stock located somewhere else but I don’t have a problem with that as I believe most people are basically honest.”
“However, different skill-sets are needed to run one store or run multiple stores,” he says.
“I was a good buyer and seller which is great skill when I had just a couple of stores but when I went beyond three stores I had to learn a little about accounting and MYOB, at five stores I had to learn about human resources, and at 10 stores I had to have a policy manual…”
Yet despite his company’s obvious success in the city and suburbs of South Australia, Albert’s success was not always welcomed by the jewellery industry.
“At one stage in 1980 the JAA tried to kick me out because one of my main competitors thought my discounting would ‘ruin the prestige of the industry’.
“I wanted to stay in the association and couldn’t see why I should get kicked out simply for offering good deals to my customers.”
Fortunately common sense prevailed and Albert even eventually went onto become president of the Association for three years in the early 1990s.
Equally importantly, Albert’s once controversial discounting strategies have now become common practice throughout the industry and retailing in general although Albert himself has bucked his own trend in his other jewellery retail business, Grahams Jewellers, where fixed prices are the norm.
Shiels Today
“When I started out I was known for discounting diamonds but then others came along and copied me, and then I was known for discounting gold and others started to copy me for that too,’ says Albert.
“I then did something that I thought would be harder for others to copy and that was to stock the widest range of jewellery possible.
“I still believe we have that point of difference.”
Today Shiels stocks items with retail prices ranging from $11 to $27,000.
“No other jeweller (high-, middle- or low-end) offers that,” says Albert.
“In addition we always strive to be first to market with new products and innovations like Madagascar rubies.
“A lot of jewellers say Madagascar or created rubies are “inferior rubies’ but we sell a lot of Madagascar rubies because we know some of our customers want a ruby and are happy to buy an enhanced ruby for $500 or $1000 rather than an untreated ruby for $15,000.
“Many jewellers think ‘if a woman can’t afford $15,000 we don’t want her in our shop’ but we think that’s a load of nonsense.
“We sell what people want. We have no issue with Madagascar rubies at all – they fill a gap in the market.”
New Directions
Albert’s attitudes and preparedness to quickly adapt to changing market needs are shared by his son, Toby Bensimmon, the new managing director of Shiels.
Thirty-three-year-old Toby grew up around the family business but nonetheless started “at the bottom” after completing a commerce degree.
“Dad always said it was up to me if I wanted to join the business or not but growing up around jewellery I really did develop a passion for it, so after I finished studying at university I dived headfirst into managing our store in Rundle Mall for a couple of years before moving into our head office and working my way through each department.”
With a thorough grounding in Shiel’s business operations, Toby then spearheaded successful moves into the WA market in 2007 and into Queensland last year, and is now largely responsible for “the evolution of the brand”.
“Competition is now really tough so we are changing to meet the market’s needs,” he explains.
Toby has also implemented a number of changes to meet the tougher conditions including the introduction of a sophisticated stock controlling system and the launch of Shiels website.
He says he invested a lot of time on the latter as “a website is the introduction to a brand”.
“I wanted to ensure that the first point of contact is congruent with our brand,” he says.
“Uninformed customers simply don’t exist anymore − almost 100 per cent of customers now research products before they walk into a jewellery store, especially if they’re buying an engagement ring or any other significant purchase.
“If your website doesn’t look slick potential customers are going to log onto the next site and that store is going to get your business − they are not going to walk into your store a week later when they’re ready to shop.”
However despite the popularity of Shiels website, Toby is adamant that all online businesses, particularly jewellery businesses, “still need a bricks and mortar store” to back up their online retail presence as “trust is so important when buying online”.
“Stores that are web-only have a harder time establishing trust with customers unless they are extremely large and brands like Amazon and Ebay.
And more bricks and mortar stores are definitely in Toby’s sights.
“Success is exhilarating and fun and it’s certainly something I want to be doing for the rest of my life so yeah expansion will happen but we’re just not really sure of the timeline yet.
“At the moment we’re concentrating on opportunities in Queensland but Sydney and Melbourne are definitely going to happen at some time.
“We are ready to roll and buy when the right opportunities present themselves”.
Further reading:
Raphael Jewellers – a hidden treasure
Raphael Jewellers is located just metres away from Australia’s busiest shopping precinct, but seems a world away from the steel and glass facades and crowds that define Sydney’s Pitt Street Mall.
Indeed visitors to the store, on the second level of 122-year-old Strand Arcade, could be forgiven for thinking they had magically stepped back into time.
The store is fitted out with an eclectic mix of antique furniture (including magnificent armchairs and an English timber chest displaying a copy of ‘The London News’ from 1855) and every spare space seems to be burgeoning with curios and artefacts from around the globe. And in between all these objets d’art are the store’s own treasures – its high-end jewellery designs.
A visual smorgasbord for shoppers and tourists alike, it is not surprising to learn that the store is sometimes even mistaken for a museum.
However, the large custom-designed jewellers bench that dominates the rear of the store quickly alerts even the most casual visitor to its true identity.
Raphael Jewellers was established by diamond setter Raphael Akelian in 1989. Eight years later, Raphael’s younger brother Joseph joined the business.
Today the store is owned and operated by the brothers who are equally proud of its heritage and uniqueness.
“Many people say Raphael Jewellers is not only one of the most unique jewellery stores in Sydney, but one of the most unique stores of any kind,” says Raphael.
“We spend as much time here as we do at home so we want to make it a warm, friendly and appealing environment for ourselves and our clientele – that’s why we’ve filled the store with such beautiful pieces of furniture and objets d’art.”
Joseph explains that being a “destination” is an added motivation to maintain the store’s uniqueness.
“We try and make the store look as interesting as possible so that when people do walk past, their curiosity makes them almost have to come in.
“Some people really do think the store is a museum and just come in and browse – some even look at everything in the store but the jewellery.”
Nonetheless, both brothers are adamant that such ‘browsers’ are not unwelcome.
“They may have not come into the door knowing we sell jewellery but some do nonetheless end up buying and becoming our clients,” smiles Raphael.
“Shoppers today really do want an experience,” says Joseph.
“In an increasingly mass market world, we’re trying to retain the old world charm of the traditional jewellery store.
“Shopping at Raphael’s is not designed to be a ‘come in, buy and leave’ purchase – it’s about
coming in, sitting down, relaxing and talking about what the client would like and what we can offer.
“The discerning jewellery collector doesn’t just want to walk into a store and buy a finished product as much these days.
“A lot of them appreciate fine workmanship and they want to see it.
“They want to see how the jewellery piece they’re buying is being made – that’s why, despite all the antiques on display, our store is very modern in its ‘open plan’ layout which has the jewellers bench as a focal point.”
Raphael readily acknowledges that it is not easy for many jewellers to offer a similar “experience”.
“If you’re in the mainstream market it can be very hard to offer such a level of service because people are coming in left, right and centre but for us, it is definitely worth it,” he says.
“A lot of clients love how much time we spend talking with them, discussing their needs and showing them how we work – it’s a part of the experience for them, and it’s part of the experience for us too.”
However, both men are also quick to acknowledge that it is not just the uniqueness of the store’s appearance or their old world charm and service that has helped the store develop a loyal clientele over the last 24 years.
Although the business has grown “steadily and organically” since its beginning, “there is no doubt” that winning the 1993 De Beers Diamonds Facets Awards competition for a pair of drop-earrings in the ‘Fancy That’ category had a huge impact on the store’s trajectory.
“Raphael was a young up-and-coming jewellery designer then, but the Award really sealed his presence within the industry,” says Joseph.
Since then, Raphael Jewellers has further cemented its designing credentials by being a finalist in the bi-annual De Beers Awards another five times (before the awards ceased in 1999), a Jewellers Association of Australia ‘Dare to Shine’ Award finalist in 2002, and the main winner at the Australian Opal Jewellery design Awards in 2003.
More recently, in 2005, Raphael Jewellers was a finalist in two categories in the inaugural Harpers Bazaar Diamond Guild Awards, and the winner of the Fancy Diamond Award.
Importantly though, the store has developed and continues to develop a strong and loyal client base by making “high-end designer jewellery” that is both appealing and highly wearable.
“We take the time to get to know our clients as much as possible so we understand them and their needs,” explains Raphael.
“We then design a high quality piece of jewellery that is just perfect for them.”
Joseph adds that the store always aims to design and manufacture jewellery that is “timelessly elegant”.
“We manufacture premium quality pieces so the client doesn’t have to remodel it in three years’ time,” he says.
“Therefore we design it so that it will survive the test of time and can potentially become an heirloom for the next generation.”
Joseph stresses that although this may make the store’s designs sound “very old school or old-fashioned”, this is not the reality as both brothers ensure all their designs have a “modern twist or edge”.
“Combining elegance with modern design is the inspiration behind our designs,” says Raphael.
“A lot of the thinking behind our designs is simply a combination of good taste and common sense.
“Creating unique designs is not difficult – the real skill is making unique designs that are attractive and wearable at a realistic price point.”
Both men believe it is this skill, accompanied with the ability to develop good trusting relationships with clients in an “old world” way that is indeed the key to its success.
“Although were not in the mainstream market clients who wear our jewellery are our ambassadors.”
Like everyone else in the jewellery industry, the Akelians don’t know what lies ahead for their business in these “uncertain times” but are determined to succeed.
“We are facing the same major challenges as everyone else in the industry – the high gold price, the Internet, the strong Australian dollar and the sluggish economy,” says Joseph, “but we both still love working in this very charming industry.”
The brothers will therefore continue to do what they have done for almost a quarter of a century.
“It is an absolute pleasure to meet and develop relationships with our clients and then create beautiful jewellery for them,” concludes Raphael.
* Pictured above are Joseph and Raphael Akelian