The recent announcement that global jewellery chain Michael Hill International would acquire its smaller rival Bevilles was certainly unexpected and caught the industry by surprise.
While the deal remains subject to approval by the Australian Competition and Consumer Commission (ACCC) and the Fair Work Commission, it brings to mind the last time a significant acquisition occurred in the jewellery retail sector - Prouds’ buy-out of Angus and Coote in 2007.
That deal was approved by the ACCC and led to the Australian Stock Exchange (ASX) listed Angus and Coote (A&C) – along with its associated businesses Edments, Goldmark and Dunklings – being acquired by the privately owned New Zealand-based company James Pascoe Ltd.
Background reading: History lesson - Prouds, Angus & Coote and Goldmark
A&C was subsequently delisted from the ASX, and more interestingly it meant that Australia’s two largest jewellery businesses were New Zealand owned.
In a similar set of circumstances to the A&C deal, the Bevilles acquisition by Michael Hill draws to an end a long family tradition.
A little history
At the time of acquisition, A&C was 111 years old and the original owners, the Coote family, had owned and operated the business for decades. The founder, Edmund Coote, passed the business down to his son Roy Coote which expanded significantly in the 1970s.
The overall business had increased to around 250 stores and the family's last owner was Tony Coote. In an interview with the Australian Financial Review at the time of the sale, he described feeling “like it was the final day of school.”
The sale came at a time when fashion jewellery trends were surging – a far cry from traditional fine jewellery which was A&C's specialty. Amid financial hardship, the company made a loss of $3.8 million in 2006, against a profit of $6 million in 2005.
It would seem that the experiences of A&C foreshadowed the road ahead for Bevilles.
Bevilles was founded in 1934 by Leo and Raie Beville, who owned a store in Melbourne’s Bourke Street.
Bevilles entered voluntary administration in April 2014, when a proposed business restructure was presented to creditors. Representatives confirmed it owed more than $10 million as the first major jewellery retailer to fail in 18 years.
The Melbourne-based company had incurred trading losses of more than $10 million over the previous three years and total claims against it amounted to $14 million. Three years later and a 49 per cent stake of the company was sold to India’s Tara Jewels.
At the time of publication, Beville’s current store count is 26, located in three states - Victoria, NSW, and South Australia.
Background reading: The rise and fall and rise of Bevilles
This is an increase of two stores since Jeweller’s most recent State of the Industry Report which detailed Beville’s up-and-down history. In 2010 the company operated 29 stores.
Time is a flat circle
The announcement of the sale of Bevilles is well-timed as Jeweller is currently undergoing a major research project. It’s interesting to note that it will be an update on a project which was first published in 2003 – and coincidentally, was spurred by the news from Bevilles.
At the time, Bevilles had announced plans to open its first retail outlet outside of Victoria. Interestingly, the business selected the Westfield shopping centre in Parramatta, NSW.
You may be wondering why that specific location was of interest?
There was no shortage of jewellery stores already present in that particular shopping centre – in fact, our research found that Bevilles would become the 22nd jeweller within the complex!
Putting aside the obvious question of 'Why does Westfield Parramatta need another jewellery store?', it prompted some other interesting discussions. We also pondered: how many jewellers are ‘too many’ in one location?
One consideration was whether the shopping centre landlords cared about the retail ratio of the complex when it comes to the jewellery category.
We decided to investigate and what began as a small series of news stories (i.e. mainly covering the Bevilles expansion into NSW), evolved into a major study of jewellery stores in all the shopping centres of Australia’s capital cities.
The May 2003 report asked the question: Do we have too many jewellers in our shopping centres?
The investigation confirmed our suspicions: centre landlords seem to operate within a specific formula - the statistics across all capital cities were too consistent to ignore!
Perhaps the most important observation was that no matter the size and/or location of the shopping centre, jewellers accounted for around five per cent of all stores. The study cast an interesting light on many other aspects of operating a business in a shopping centre - I wonder if their retail ratio has changed?
The best is yet to come
I mentioned above that just prior to the announcement of Michael Hill acquiring Bevilles we had coincidentally begun an update on the original investigation.
It appears serendipitous for our 20-year anniversary of the original report.
I have no doubt that the industry will have changed dramatically over the past two decades – whether it be due to the increased levels of online shopping, the lingering effects of the COVID pandemic or changes to consumer habits and how it will continue to shift with the introduction of AI - there’s more change to come!
Indeed, Michael Hill has already declared that over the next five years it plans to open more than 80 new Bevilles locations in Australia, New Zealand, and Canada.
For now, I have to leave it here. We are now completing the research of the relevant data, and I’m sure the report will give you a valuable insight into jewellery retailing.
The new report will be released in December. Watch this space!
That said, one thing is for sure, Mark Twain was right: History doesn't repeat itself, but It often rhymes!
More reading - Michael Hill and Bevilles
Shock takeover: Michael Hill acquires Bevilles - April 2023
Michael Hill and Bevilles: A tale of opposing branded watch strategies - May 2023
Bevilles Jewellers closes CBD store - August 2011
Bevilles Jewellers closes Queensland stores - June 2012
Indian company joins Bevilles, stores to close - January 2013
Bevilles gets a makeover, dumps giftware - October 2013
Bevilles jewellers enters administration - April 2014
Bevilles jewellers back in business - May 2014
Valuable lessons from the Bevilles collapse - May 2014
Bevilles opens first new store since collapse - August 2014
Bevilles Jewellers returns to Melbourne CBD - December 2015
Indian company to acquire stake in Bevilles jewellers - October 2017
Background reading & History
State of the Industry Report: In-depth analysis of Australia's jewellery chain stores over a decade
History lesson - Prouds, Angus & Coote and Goldmark
The rise and fall and rise of Bevilles
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