After 20 years of ‘sponsoring’ the Jewellers Association of Australia (JAA), Gunnamatta Media, publisher of Jeweller, has decided to not renew its publishing contract. Given the magazine has supported the JAA since 1996 with substantial financial backing, we believe it appropriate to provide an explanation for the reasons this course of action was taken.
Since I launched Australian Jeweller – as it was known back then – more than two decades ago, the magazine has provided financial support to the JAA with cash and ‘in kind’ – marketing-related services, such as advertising space – to the tune of hundreds of thousands of dollars.
Such sponsorship agreements for industry associations are not unusual; the JAA receives financial support from Marsh Advantage Insurance and, until last year, it also received substantial financial payment from Expertise Events, the organiser of the International Jewellery Fair (IJF) and the Australian Jewellery Fair.
Each of these agreements began at a different time and for different reasons and yet each company would have made its decision in the belief that businesses that service an industry should also support that industry.
I know the management of Jeweller believed that and I have no doubt Marsh and Expertise Events would have had similar views. Industry associations effectively have two major sources of income – membership fees, which represent their core activity, and sponsorship income in various forms. The job of an industry association is, first and foremost, to represent its members.
With the current five-year contract concluding this month, the JAA requested to begin negotiations on a new agreement late last year.
Continuing membership decline
It’s no secret that Jeweller, and many others in the industry, have been concerned about the management and direction of the JAA for some time. All associations and businesses have blips along the way but the number of people who have raised concern about the JAA’s direction and some of its decisions has become too many to ignore.
It’s also no secret that membership has been falling year-on-year to the extent that, according to the JAA’s own financial reports, at one point annual staff costs became greater than annual membership income.
I have previously called for changes at the JAA – in late 2014, I wrote that the previous two to three years had been an inglorious period for the JAA office and I called for an independent review of the CEO position following the decision not to renew the contract of former CEO Ian Hadassin.
There was no independent review of the JAA office and structure. Instead, in June 2014, the JAA appointed Amanda Hunter as its executive director.
Hunter said she would “bring strong business skills to manage the organisation and take it forward strategically”.
She added that, “Growing the JAA whilst helping the members also grow their businesses is very appealing and fits well with my past coaching and sales-management experience.”
I acknowledged a few months into her tenure that Hunter had gotten off to a good start but also noted the strong industry expectation that a fresh-faced industry outsider was necessary to reunite a somewhat fractious industry and reinvigorate the trade.
Nearly three years after Hunter’s appointment, where are we now?
Well, membership continues to decline and many long-term retail and supplier businesses have deserted the JAA for a number of different reasons.
A year to forget
Looking back, last year did not start well. In February the JAA announced the 2016 edition of its biennial Australasian Jewellery Awards then cancelled them just one month later because of lack of sponsorship.
It was an embarrassing decision because the JAA had two years to secure the sponsorship and failed, in part because the 2014 Awards night was not perceived as a glowing showcase of the industry. It should be noted that the JAA steadied and recently announced the 2017 Awards with a list of sponsors.
Alas, worse was to come. In May, after a 25-year affiliation with Expertise Events, the JAA informed the industry that it would run its own trade fair in direct competition with the Expertise Events show. Not only did the JAA walk away from a guaranteed $100,000 in cash sponsorship plus additional non-cash support, but its decision also caused a major rift among suppliers and retailers.
Suppliers were now being asked to exhibit at two fairs on the same days in the same city to service the same buyers.
Understandably, they were up in arms. Many complained that the JAA, a membership-based association, had overnight become a trade-fair business and were thereby putting member’s funds at risk with a large commercial venture. Additionally, several people asked whether the JAA had the resources or infrastructure to run a tradeshow given its small staff.
It was a bold gamble because it meant the JAA must generate a substantially larger profit than $100,000 just to be in the same position with the Expertise Events sponsorship, and for which it had to do, effectively, nothing.
A media release issued on May 23 about the ‘2017 JAA Jewellery Fair’ declared, “This landmark announcement is being delivered amidst great excitement, after detailed research, analysis and discussion by the JAA board and executive director.”
That announcement started a legal battle between lawyers for the JAA and Expertise Events. In fact, having announced that it had “undertaken detailed research, analysis and discussion”, the JAA quickly had to rename its event ‘JAA Jewellery Tradeshow’ because of legal issues over the name.
So much for detailed research and analysis!
Suppliers and all three buying groups were rightly worried about the effect of the dispute on the then upcoming 2016 Sydney IJF; Nationwide Jewellers and Leading Edge Group Jewellers both announced to members that the respective groups would make a decision about the 2017 trade fair after the 2016 Sydney show. Showcase Jewellers had previously announced attendance at the JAA Jewellery Tradeshow.
Things went quiet for a few months leading up the 2016 IJF and then all hell broke loose once the fair concluded.
On September 7, following extensive consultation with its members and suppliers, Nationwide declared that the only location appropriate for a jewellery fair was at the International Convention Centre, Darling Harbour – the site of Expertise Events’ IJF – rather than the former Sydney Showground, Moore Park – the site of the JAA Jewellery Tradeshow.
Leading Edge made a similar announcement the subsequent day.
The industry fallout begins
Although Nationwide announced its decision to members and suppliers late on September 7, it had informed the JAA earlier that day, ahead of the scheduled board meeting on September 8.
This was done because Nationwide managing director Colin Pocklington was also a JAA board member and he felt it was important for the JAA to know about the decision before the board meeting to avoid any conflict of interest. Pocklington did not attend the board meeting, which allowed the board to freely discuss the ramifications.
This is the point where the industry went into freefall. On the day of the board meeting, Pocklington reflected on the situation and his position as a board member and decided that it would be appropriate to resign to avoid any future conflict of interest, given that the JAA would need to focus on launching its new trade fair.
Pocklington advised Hunter of his resignation on the morning of September 9.
Later on that same day, Pocklington said he received email correspondence from the board that contained allegations about his professional reputation that he found “offensive”. He subsequently resigned from his other JAA positions on the Code Committee and National Industry Advisory Council.
Legal action ensued.
Not content with that outcome, the JAA issued a media release on September 29 titled ‘JAA Board replies to resignation of director’.
It alleged a “further conflict of interest” by Pocklington and was ‘signed’ by JAA president Selwyn Brandt, vice president Laura Sawade (now resigned) and executive director Amanda Hunter.
Nationwide immediately consulted with its lawyers and then declared that Australasia’s largest buying group would quit the JAA after 25 years of continuous membership.
This resulted in a wave of support for Pocklington and Nationwide from its members and well-known suppliers criticising the JAA and/or declaring they would also cancel their memberships. As many as 100 Nationwide members are also members of the JAA – well, at least at that time.
In addition, many suppliers told me in confidence they could not believe the JAA’s attack on Pocklington and would also cancel their memberships.
Making a final decision
This brought Gunnamatta Media to a point where we had to make a decision about whether we, as publisher of Jeweller, should continue to help finance and support an industry association that is not only in decline but also has split the industry with a series of misguided decisions.
Prior to making a final decision, Jeweller undertook a telephone survey of more than 300 jewellery retailers, resulting in the completion of 200 detailed, qualitative responses – 100 JAA members and 100 non-JAA members – to help understand the state of the industry.
The survey was extensive, polling jewellers about a wide range of issues including business turnover and profitability, challenges facing retailers – the issue of two jewellery trade fairs, as well as their views on the JAA.
After collating and analysing the survey information, the results played a major part in the decision to end our 20-year financial sponsorship of the JAA.
One notable finding, as outlined in Table 1, is the response received when asked about the Vision and Mission Statement listed on the JAA website. The results show that only 62 per cent of the JAA members surveyed agree that their own association is recognised and respected for excellence and trusted leadership.
While it is unreasonable to believe that any industry association would achieve a 100 per cent ‘agree’ on such a question, surely the result should be above 90 per cent by anyone’s reckoning.
Put another way, 38 per cent of its own members are undecided or do not agree that their professional association can be relied upon for excellence and trusted leadership in the jewellery industry.
The figure is understandably worse among non-members, with only 43 per cent agreeing with the statement. This means only half of the jewellery retailers surveyed believe the JAA is achieving its vision to be recognised and respected for excellence and trusted leadership.
Recognising that statistics can be read in various ways, what should concern the JAA – given membership numbers are in decline – is that about 21 per cent of the JAA members surveyed view their membership fee as ‘poor’ or ‘very poor’ value for money, while about 45 per cent rank it as ‘acceptable’, as shown in Table 2.
Another question that should be a major concern for the JAA is that of those surveyed, less than 40 per cent of members are satisfied with how the JAA supports their business, as outlined in Table 3.
These two results may go a long way to explaining the decline in membership in recent years.
Finally, Table 4 shows that the majority of JAA respondents – 74 per cent – believe that there has been no significant change in member benefits over the past three years.
What is outlined here is only some of the research conducted; other questions achieved similar results (see Table 5, Table 6), and therefore, after extensive internal consideration and external consultation, Gunnamatta Media decided it could no longer support an association that is in continual dispute and disagreement with its own retail members, its own supplier members, its financial sponsors and even its own board members.
The money we will save on JAA sponsorship played no part in the decision and over the coming months we will be looking to re-divert our financial sponsorship dollars to another cause, perhaps supporting jewellery apprentices.
The JAA’s ‘perfect storm’ did not happen overnight, or even over the past 12 months; the disunity among its own retail and supplier members, financial sponsors, board members and resigning members goes a long way to explaining the survey results and, eventually, our decision to end Jeweller’s financial sponsorship.
Further detailed reports and explanations can be read below:
JAA fails own vision and mission statement
Jeweller ends 20-year relationship with JAA