It’s been more than two years since the Jewellery Association of Australia (JAA) made the disastrous decision in April 2016 to launch and manage its own jewellery trade fair, ending its relationship with Expertise Events and losing the vital financial support that came with it.
History shows that the JAA’s decision divided the industry – directors resigned, members quit en masse and Australia’s largest retail group Nationwide Jewellers declined to renew its membership after 25 years.
The fallout proved financially disastrous, with the JAA reporting a $131,829 loss to members in its 2017 financial statements – a result that pushed the association into negative equity. Worse still, one can’t be sure if this loss is even accurate; the financial statements were riddled with errors, and are now under investigation by the compliance division of the Institute of Public Accountants.
Not only were the original financial accounts issued to members last October error-ridden, they also showed the JAA business model to be unsustainable, given its executive director Amanda Hunter was paid 52 cents in every membership dollar in that year.
Around the same time, information emerged that JAA president and board member Selwyn Brandt had decided against his company, Australian Jewellers Supplies (AJS), participating at the new JAA fair. This is despite he being one of the instigators of the decision to break away from Expertise Events and start a rival show. It meant Brandt’s own business wasn’t going to exhibit at the very fair he was promoting!
At the time some directors declared they were unaware of this, with one board member telling me that he/she would not have supported the breakaway move if they had known that the president’s own business would not be supporting the new fair.
It got worse when it was discovered that Australian Jewellers Supplies was not even a JAA member!
Ongoing fallout
The JAA’s many missteps continued, and so has the resulting fallout.
Just recently, I received a phone call from someone who expressed utter dissatisfaction after contacting the JAA head office. He said when his phone call was finally returned, “they seemed to be disinterested in anything I said.”
I still receive calls and emails about JAA membership, and the sad thing is they all carry the same message: we would like to support an industry association, but we also don’t want our money going down the drain.
It is perhaps expressed best by the following email, which has been slightly edited for clarity and anonymity: “I would like to know if you can offer a suggestion with regards to renewal of JAA membership. We have been members for years because we like to belong to the association or at least be a part of an association for jewellers. I am happy to pay membership fees as long as it’s not wasted because of their problems. We rarely make use of the association, however we prefer to be a part of one for different reasons.”
Sadly, this sentiment is rampant across the industry; while the noise may have stopped, the dissatisfaction hasn’t.
Background reading: JAA’s fall from grace; TIMELINE: Tracking a Decade of Division
More recently others have pointed to the JAA’s website, which is almost inactive. The last ‘jnews’ – the JAA’s monthly enewsletter to members and the wider industry – was posted in February, six months ago. The most recent blog post dates back to June 2016!
The JAA’s popular ‘robbery alert’ page doesn’t appear to have been updated since January when it detailed a Toorak robbery. Unfortunately, there have been many jewellery store robberies since then, however, the so-called peak industry body has not seen fit to update its member website.
An industry association exists for its members, right?
So you would think the JAA’s ‘Current and recent projects’ page would be chock full of member news and activity.
Wrong! The page has a ‘coming soon’ headline.
When you consider the above points, as well as many others, you can well understand the sentiments of the former JAA member above being happy to pay membership fees as long as it’s not wasted.
Now that the 2018 financial year has ended, it’s likely that the JAA will record another loss, with as much as $60,000 in bad or doubtful debts being written-off, which perhaps should have been accounted for last year.
Membership fees
With JAA membership at an all-time low, I have previously called on Selwyn Brandt to stand down in a bid to reconcile industry factions under a new leadership. Instead, Brandt stood for re-election, which is his right, and re-assumed the presidency again this year.
However, there’s a chance for a breath of fresh air in 2019 given that the JAA Constitution precludes Brandt standing again.
The constitution states “a director shall not hold office for more than six consecutive years” and depending on the outcome of the Institute of Public Accountants’ investigation into the last year’s financial accounts, it may well be prudent for other directors to consider their position, too.
Regardless of the shocking management decisions of the past, it is incumbent on the JAA board to not only rebuild its reputation – it is for others to judge if that can be done – it must deliver on its mandate to provide value and services to its paying members.
This leads me to my next point: JAA membership is not cheap.
The lowest annual fee for a jewellery store is $349, provided it has only one employee – including the owner. That’s a very small store, however I think it’s fair to say that the ‘average’ retail operation would have 4-5 staff, which means the membership fee jumps by a whopping 72 per cent!
Is there a resulting 72 per cent increase in membership value and services? I doubt it.
In fact one supplier told me last year that he would be happy to pay $300–$400 per year knowing he would gain little value for the membership fee. He explained that he’d see it like a charitable donation - a way to support the industry. However, his annual fee was closer to $2,000 and at that cost he decided to quit the association.
He saw little to no value in membership at that cost and was perplexed that another supplier could pay as little as $349 based solely on staff numbers. He would not receive fives times the value as the smaller business.
Further, the cause was not helped when the same supplier realised that 68 per cent of the JAA’s total revenue was paid to staff (add office costs and you’re up to 83 per cent) which begs the question: for whom does the JAA exist – members or association staff?
There is no doubt that the JAA membership fee structure is outdated. It dates back to a bygone era; it’s confusing and creates a disincentive to join, regardless of whether membership fees are “wasted” or not.
There are 33 different membership fees based on a business’ category!
Not only does the pricing penalise successful storeowners, it also penalises multi-store retailers and, in the digital age, that doesn’t makes sense.
For example, I know of one small multi-store retailer that quit the association last year because of the lack of membership value as well as the JAA’s disastrous industry politicking.
If the JAA has a desire to rebuild its membership numbers from the current lows, it might consider starting with a more equitable and logical fee structure – 33 categories is ludicrous.
Where to for the JAA
I have previously written that the retail buying groups offer far greater value at all levels, from fees through to education and training. Their annual conferences are often world-class and all offer regular activities throughout the year.
Given that JAA’s recent activity – or lack thereof – is it any wonder that the buying groups account for far more members than the JAA?
Not for the first time have I suggested that the JAA needs a thorough review of its raison d'être. For example, what should an industry association look like in 2019 and how should it be modeled into the future?
Clearly the JAA cannot just go along its merry way without adapting? Changing and simplifying its membership fees would help and it also cannot continue to be divisive and hostile.
And on that point, I note that the JAA’s Vision and Mission Statement was dramatically altered after its executive director resigned 12 months ago.
So, where the website once listed a long and detailed raison d'être which included:
- to be the peak industry body that represents greater than 75 per cent of industry participants
- to be recognised and respected as an organisation for excellence and trusted leadership
- to be the first point-of-contact for thought leadership
- to be the first point of contact for best practice advice for my business
- to be the first point of contact for career opportunities
it now has a simple two sentence mission statement: “Advancing the Australian jewellery industry through representation, unity and consumer confidence. To continue to be the united voice of the Australian jewellery industry.”
The changes might also have something to do with our survey in April 2017, which discovered – among many other things – that only 62 per cent of JAA members agreed that their own association could be recognised and respected for excellence and trusted leadership. That's an appalling result.
It’s up to readers to judge whether the JAA can make the claim of ‘continuing’ to be the united voice of the Australian jewellery industry given the turmoil and disunity its decisions created, but by anyone’s reckoning one measure of such success would be membership numbers and association income, including sponsor revenue.
On both counts, the JAA fails those tests and one wonders whether the soon-to-be-released 2018 financial statements will change anyone’s view about its financial predicament or the future of a once-proud industry association.
Only time will tell, but one thing is for sure, a complete review of the JAA is now more important than ever before. Sadly, I doubt that it will happen.
More reading:
Jewellers association financial statements raise questions - October 2017
JAA accounting investigation continues - October 2017
New JAA Financial Statement raise more questions - November 2017
Unanswered questions at JAA AGM - November 2017
JAA fails own Vision and Mission Statement - March 2017
Jewellers Association needs a Brexit - October 2017
More industry division over two jewellery fairs - September 2016
Nationwide, Leading Edge make 2017 jewellery fair decision - September 2016
JAA’s perfect storm: Nationwide quits association - October 2016
Amanda Hunter resigns; 2017 JAA jewellery tradeshow cancelled - May 2017