FEATURE: Hot Diamonds, hot results
A standout company for its sales performance in 2014 was Hot Diamonds. The firm’s revenue growth of 101%, however, is not an accident. We caught up with commercial manager Adryan Cresswell to find out what the secret is.
First, it is important to state the figures – they are the most impressive part. HD Group, the umbrella company for the Hot Diamonds and Emozioni brands, posted a 70% increase in full-year sales within its independent store network throughout the course of 2014, and in December, a year-on-year sales increase of 101%. All very well, you might say, if the firm is managing to get its stock out to retailers, but how is the business working for stockist? As Adryan Cresswell, head of commerce explains: “We were quietly confident of a strong Christmas with our independent network as sell-in and sell-through in the lead up to the crucial period had been encouraging.” Sell-out, he says, was “strong”.
It is worth going back a little bit to try to discover the genesis of this sudden, though not unexpected, increase in sales. Cresswell explains that when he joined the company, it was undergoing a transition, but was not in the healthiest shape – he and his team have spent the last four years “working hard to turn it back into a healthy, profitable company”. And with the addition of a new brand called Emozioni and an intensified focus on the international market – through the promotion of brand manager Andrew Lewis to head of international sales – the firm has enjoyed a groundswell of take-up from stockists both in the UK, Australia and the US.
“Now jewellery is a bit more linked with fashion, you have to be very quick”
There was an element of timing, Cresswell admits, as well as the need to be incredibly nimble. “Now jewellery is a bit more linked with fashion,” he says, “you have to be very quick. Emozioni was developed from scratch to market-ready within five months. There’s a moment in time when you can launch a concept, and in this particular part of the jewellery market, that door closed just a few months after we launched the brand. If we hadn’t launched at the Spring Fair in 2013, I think we would have missed the boat.”
So what exactly is Emozioni? Essentially, it is a response to the explosion in popularity of the interchangeable coin trend. Hot Diamonds thinks jewellery, for which the interchangeability of the coin is the ‘key thing’, is a gimmick and lacks longevity. “All the wristwear and neckwear and earrings and rings we make are beautiful pieces of jewellery individually,” says Cresswell. “We think that stops it being a gimmick, whilst the ability to adorn the items with coins if you want to will always be there.”
Hot Diamonds’ overall retail footprint is sizeable already. With 400 doors in the UK, over 100 in Australia and 100 in the US as well, the firm has respectable penetration in some large markets (not to mention these being the economies enjoying the most robust growth anywhere in the developed world). “We’ve always said we have a figure in mind for the total number of retailers in the UK – around 500 – but what we want to do is increase sales in those doors exponentially in the years to come. When you look at the increase Emozioni saw in December of 316%, it didn’t actually come through an increase in the number of doors, but through more stock being shifted by each door.”
“You have to work very, very closely with the market, fully understand what the trends are and you have to have a very honest relationship with your sales people and your brand managers”
The jewellery is changing – and increasing in quality – with time. The high price of silver meant that in its initial forms, the jewellery had to be lighter in weight in order to be a profitable proposition for both HD Group and for stockists. However, the firm is making some changes to bring heavier designs in again now that the price of silver has come down. “Heavier chains and slightly longer chains with good sell through”, are adding to the bottom line, says Cresswell.
He also points out that the firm is starting to be able to attain higher price points thanks to an uplift in the average spend of the consumer. Importantly, responding to the demands of that consumer quickly is a significant strategic element of the business. “From CAD to sample is four weeks, and from sample to production is another four or five weeks – this means we can get new collections to market within about nine weeks total. Four years ago that may not have been necessary, but these days you do have to move very quickly indeed. You have to work very, very closely with the market, fully understand what the trends are and you have to have a very honest relationship with your sales people and your brand managers.”
The firm has five brand managers regularly sent out on store visits, and after “listening very carefully”, they bring back the feedback to Hot Diamonds HQ, where it is fed directly into the design and branding process. “We saw feedback indicating that people wanted longer, heavier chains – three years or so ago we couldn’t have achieved that look at a reasonable price point, but now we can.”
So what does the immediate future hold for the company? Cresswell says there are plans afoot for new POS elements to be rolled out, and later this year another launch. A new office has opened in the US with 4 employees, but which he can see “growing quickly throughout this year”. “A real focus in the UK is going to be on the independents network – we want to take it to another level.”