Riding the red carpet and rising demand, Chopard is staking much of its growth on one-of-a-kind jewelry that sells for millions of dollars.
These high-end pieces, which so far have seemed impervious to economic trends, will be a focus of the company's 100th store, a 3,000-square-foot flagship at 709 Madison Avenue in Manhattan featuring a new design scheme. The store launches on Nov. 12, but will have a soft opening at the end of this month.
"This global creation of wealth is affecting us," said Marc Hruschka, Chopard's U.S. president and chief executive officer. "It's a mixture of our traditional shoppers and a new growing-wealth class in the U.S. and globally. Our challenge is to communicate that we're not only a watch brand....People are looking at diamonds as art."
The surge in popularity of fine jewelry has been attributed partly to being viewed as a strong investment among the newly monied, leading to a spate of retail launches. Graff and Leviev, which pride themselves on their grand collections of large diamond and gemstone jewelry, have been aggressive in opening stores in the U.S. and around the world. Smaller brands such as Kwiat and new jewelry brand Ivanka Trump are getting in on the retail diamond market.
"There is a lot of room to grow" in high jewelry, said Chopard co-president Caroline Gruosi-Scheufele.
The Jewelers of America said jewelry sales last year were estimated at $55 billion, up from $51.5 billion in 2005. Diamond jewelry distribution of sales were 35 percent, while loose diamonds were 15 percent, according to the Jewelers of America's 2007 Cost of Doing Business Survey.
Gruosi-Scheufele is the driving force behind the 147-year-old Swiss watch and jewelry brand's entry into the high-end category. The firm started creating exclusive, show-stopping pieces a decade ago when it began hosting the Cannes Film Festival.
Gruosi-Scheufele, a supporter of young actresses, sought to bedeck starlets in lavish jewels to help make their red-carpet appearances more spectacular. Gruosi-Scheufele named Penélope Cruz as one of her best "discoveries" when she loaned the actress jewels years before she became a household name. It didn't hurt the brand, either. Chopard is practically synonymous with the Cannes festival, and the brand's jewels are worn by top-tier actresses, including Hilary Swank and Charlize Theron, and now the consumer demand for the goods is higher than ever, said Gruosi-Scheufele."High jewelry is my passion," she added. "For [high jewelry], you need a lot of patience and a lot of passion."
Two years ago, the brand upped the ante in the high jewelry market by opening a factory in Geneva and by elevating its presence in stores. The company now produces 2,000 pieces of high jewelry each year.
Unlike competitors such as Leviev and Graff, one of Chopard's priorities has not been owning diamond mines. "One of our biggest challenges is [diamond] supply," Hruschka said. "There's a bigger demand and the supply is the same."
And Gruosi-Scheufele acknowledged that acquiring interests in diamond mines would be a profitable strategy.
"We would have direct access to the rough," she said. "We do everything ourselves from A to Z."
By and large, rough diamonds are sold through mining firm De Beers' exclusive network of siteholders.
Watches comprise 55 percent of Chopard's sales, and jewelry makes up 45 percent. The privately held company declined to reveal its annual volume. High jewelry is a fast-growing category for the brand, and comprises 15 to 20 percent of the business. Hruschka said some of the growth is a result of new clients from Russia and China.
The flagship is a departure for the brand. The store was designed by French architect Thierry Despont. Gruosi-Scheufele gave Despont, who typically designs residences, atypical inspirations for a jewelry store, such as Ferraris and Armani.
The landmark building's facade is made of stone with cast-iron detail with large windows. The window displays combine the aesthetics of classicism and futurism with traditional jewelry display cases encased within a custom-designed video-screen frame, which rotates. The company will commission video artists to fill the screen periodically.
The interior has the feel of a mansion, with a fireplace topped by a still-to-be completed gigantic Chopard clock, pickled oak floors and lush carpeting, decorated subtly with the firm's script logo. There are private nooks to seat clients throughout the two-story space, as well as two freestanding display cases made of curved glass and minimal metal, and an intricate screen made of wood, glass and metal embedded with showcases.The mezzanine will house high jewelry pieces and a well-appointed room for important clients.
For the first time, the company has created a collection of watches and jewelry for a particular store. The 709 collection, named for the flagship's address, features watches for men with the case back engraved with the Manhattan cityscape. There is also a spin on the company's famous Happy Diamond floating diamond style with the Happy Apple — pendants for women featuring a pavé diamond apple, in a nod to the Big Apple.
There is also a high jewelry component to the collection. While some pieces are still being made, there is an impressive necklace with emerald drops, a ruby bead necklace and a pearl and diamond collar that will be available solely in the Manhattan store.
Industry sources estimated the store could bring in $10 million in sales in its first year.
"From the point of view of Chopard, putting their presentations into the superluxury market sets the firmament of great marketing and great advertising," said Andrew Jassin, managing director of the Jassin O'Rourke Group, a New York consulting firm, who explained the promotion of the company's high jewelry will lead to further success in watch and jewelry collections. "It's advertising for other products that Chopard sells. It makes those products more valuable."
In regard to wholesale, the company is sharpening its distribution. In two years, the brand has cut down its wholesale doors from 180 to 160 in the U.S. Internationally, Chopard is available in 1,500 doors.
"It's not about a number," Hruschka said. "It's about having the right partners."
The company is opening its 101st store in Tokyo before Christmas. Other locations include Los Angeles, Paris and Geneva.
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