The family-owned manufacturer of crystal and crystal-related products is on the acquisition trail, as it bids to topple Cartier and Tiffany & Co. to become the global leader in the fine jewelry segment.
“We are number one in the fashion jewelry segment definitely, but we want to strengthen our position further by reaching out a little bit beyond what we’re doing now, by extending our price positioning upwards by means of internally developing new concepts and brands to a certain extent, and making acquisitions that make sense,” Robert Buchbauer, a member of the Swarovski executive board, told WWD while outlining the company’s global strategy for the next seven years, dubbed “Vision 2020.”
Swarovski hopes to turn into a multibrand group by buying three or four jewelry brands.
“We have a very strict and limiting list of criteria that we want to apply to any kind of company to be acquired, some of which being the profitability, the growth rate, the minimum size, the brand recognition and awareness and the possibility to develop it on a large scale,” Buchbauer said.
The group signaled its grand ambitions at the last Baselworld watch and jewelry fair, where it unveiled a booth by award-winning designer Tokujin Yoshioka, who also created its flagship in the Ginza district of Tokyo. Spanning more than 21,500 square feet, the stand was surrounded by a 10-foot-high, curved wall adorned with 253,231 mirrored reflectors and 22,856 LED lights, giving the illusion of a crystal structure.
Swarovski logged revenues of about 1.7 billion euros, or $2.19 billion, from its consumer goods business in 2012, he said. Total turnover for the Swarovski Group, including business-to-business activities, stood at about 2.3 billion euros, or $2.96 billion, Buchbauer said.
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The executive acknowledged that while the Swarovski brand on its own may not succeed in toppling the current market leaders, the group as a whole hopes to become a serious challenger. “There’s still a lot of room for us to get there, but you have to put some ambitious goals in place,” he said.
Another pillar of development is organic growth. The company hopes to expand its network of monobrand points of sale, operated directly or by partners, to 3,000 by 2020 from 2,300 at present, mainly thanks to growth in emerging markets such as Brazil and Indonesia and expansion in North America.
Swarovski also plans to develop in-house brands and concepts by growing categories such as fashion accessories, small leather goods, electronics and stationery, in addition to its existing eyewear and fragrance licenses.
Watches, launched in 2009, should account for 15 percent of net sales in the consumer goods division by 2020, versus 5 percent to 7 percent at present.
“It’s important to keep a monobrand retail distribution concept interesting and relevant for the consumers by adding on new categories without losing focus, of course, of our core business, which is the jewelry,” Buchbauer said.
Within that category, which made up 75 percent of net sales last year, Swarovski is seeking to optimize its offer and maximize the reach to new consumers.
To that end, it has begun to test a new fine jewelry concept in China, where it has converted 20 to 25 percent of the overall surface of six stores into Swarovski Fine Jewelry corners featuring dedicated architecture and specially trained staff.
“We want to find out whether Swarovski as a brand is able to credibly carry a fine jewelry line. The first indications of our test in China are that this is the case,” Buchbauer explained.
The debut Love Paradise collection is made of 18-karat gold, diamond, sapphire, amethyst and topaz, with prices ranging from $600 to $2,000, he said.
“The test in China will run until the end of this year and then we will decide on a further rollout, depending on the detailed results,” he added. “One of the important things for us is to have a good part of that assortment distributed through our own stores, because that would definitely have a very positive effect on the overall productivity of our stores.”
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