the Ratner Group. Costume jewellery consisted of pieces made from all
other materials, including gilt and gold plate. In the early 1980s the manu-
facturing industry was very fragmented, with around 2000 manufacturers
in the UK and globally tens of thousands.
Jewellery was still considered a luxury item, infrequently purchased and
designed to last for life; but given so many retailers and manufacturers,
branding was considered impossible because of the high advertising spend
required. Traditional independent jewellers were very product oriented, an
effect reinforced by the training of staff, who were more likely to be recruited
for their ability to repair or value a wide range of stock, rather than any
ability to sell. The image was of engagement rings bought in a sedately fur-
nished store, from a sombrely dressed assistant, who whispered the price to
the purchaser so that the intended wearer could not hear. Despite the threat
of increasing competition, many considered this traditional approach a
recipe for continuing success. Mark-ups were still 100 per cent, with an
annual price rise of 10–15 per cent regardless of inflation. British Home
Stores ́ David Cassidy was subsequently quoted^1 as saying that:
You in the jewellery trade, as customer surveys indicate, are in a very, very
happy position. Price is not high in the purchaser’s decision. You have the
opportunity to observe the change in lifestyles and to build an environment
and an attractiveness which will ensure your profitable survival. But I believe
you have a bigger opportunity, you are predominantly independent. You are
small, and in retailing small is beautiful ... you can motivate staff in ways that
we [British Home Stores] would find impossible. If you lose out to the major
chains who can only offer a price advantage you will only have yourselves to
blame, and I do not believe you will.1982, when Gerald became joint managing director beside his father, was,
however, a particularly poor year, with the whole of the jewellery industry
suffering bad results. The recession had reduced consumer demand, bad
weather had affected the all-important Christmas sales period the year
before, and an increase in VAT, compounded with a sharp increase in the
price of gold, had all added to the retailers’ problems. Stock replacement
had resulted in higher cash costs, as stock was traditionally paid for in
advance. Caution was spreading through the industry, with rumours of sig-
nificant de-stocking by some companies. Some commentators believed that
many firms were only surviving by the generosity of their bankers and of
tolerant landlords. It was also felt that the recession had changed the nature
of the purchase for many consumers, opening the way for the department
stores and mail order catalogues to offer mass-produced, imported items at
the lower end of the market. This affected the perceived value of the crafts-
man-manufactured products of the old school. Others offered a contrasting
opinion, stating that the discounters and catalogue companies, such as
254 Relationship Marketing