When House of Jewellery (HOJ) and Australian Jewellers Supplies (AJS) announced that, as of today, they would merge and trade under the business name AJS, the companies labelled the consolidation of the suppliers’ operations a “compelling and positive transaction for all concerned”.
However, many jewellers and “benchies” were left wondering if this comment extended to them, with a number quickly taking to industry online forums and Facebook pages to discuss the issue.
At the time of the announcement last week, then HOJ managing director Selwyn Brandt assured the market that “increased buying power will filter through to retailers in the form of lower prices”; however, much of the industry commentary was sceptical, with some believing that the reduced competition – given there is now one less player in the market – would instead lead to heavy price increases.
A number of people pointed to the large savings on equipment that can already be made online, saying that price differences could not be ignored, while others agreed that the rising costs of local jewellery tools could result in more Australian jewellers sourcing cheaper equipment overseas.
Not all comments were negative. Some defended the merger and potential price increases, noting that local suppliers were required to pay import duties and landing costs for tools and equipment – something that overseas suppliers were sometimes able to avoid.
In the context of a jewellery industry that has struggled in recent years, leading to the closure of a number of businesses, one advocate suggested the new arrangement was probably a matter of necessity.
Amongst the many changes that would undoubtedly occur as a result of the merger, numerous jewellers hoped that one of them would include improvements to the new business’ website, with particular focus on upgrading the online store.
Another point of interest raised was whether the move would prompt well-known, international tools and equipment suppliers to enter the Australian market and to offer more competitively priced goods.
Advocates highlighted the need for continued support of Australian suppliers as they were able to offer convenient local service and knowledge that cannot be found when buying from overseas suppliers.
Responding to concerns
In response to the issues raised on the industry forums and Facebook pages, Brandt, who has assumed a new role with AJS as director of business development, told Jeweller he believed local competition would continue.
He said that while the merger between AJS and HOJ did combine the activities of “two large” jewellery tool and equipment suppliers, there were still quite a number of other similar businesses trading in Australia.
Brandt also added, “Competition remains as strong as ever because of global influences and online suppliers that have been prominent in the market for some time.”
In order to highlight some of the services that may not be offered by overseas suppliers and online stores, he said, “All of our products are backed by warranties and we hold spare parts in stock where required. For equipment requiring training, we have expert staff to assist customers with their machinery purchases.”
In addition, Brandt explained that a new website, which is currently being developed, would be launched shortly.
Both HOJ and AJS have operated within the Australian market for numerous years, with HOJ being established in 1977 and AJS being founded in the 1980s – although its heritage can be traced to 1857. The new combined company offers a range of products including jewellery tools, equipment, findings and packaging and display material.