The arrival of not one, but two, sterling silver jewellery chains (Magnolia Silver and Butterfly Silver) in Australia in the last few years is clear evidence that silver jewellery can no longer be ignored by fine jewellery traders.
Australians, it seems, can’t get enough of the affordable white metal – and the trend is not limited to our shores.
According to the just released World Silver Survey 2011released by GFMS, the world’s leading metals research company, silver jewellery fabrication rose by 5.1 per cent last year to reach a five-year high of 167.0 Moz (5194 t).
“The consumption of silver jewellery in its main markets of the industrialised world is understood to have risen last year, perhaps by just over five per cent.
“This stands in sharp contrast to gold, as these markets typically saw losses in a range of 10 to 15 per cent.”
The research company concluded that this divergence cannot be attributed specifically to the year-on-year change in the price of gold as gold’s rise of 26 per cent was far lower than silver’s 38 per cent jump.
“Nonetheless, it seems fair to argue that gold’s absolute price level had become more critical, as substitution to silver showed little sign of easing.
“More importantly for silver, there was no sign of the metal merely becoming just a substitute for hard times as its own attractions remained strong, still being perceived in many markets as more youthful and fashionable than gold.”
Locally, Nati Harpaz, the CEO of Magnolia Silver in Australia, believes silver’s affordability and fashionability are key to the retailer’s success.
Launched in Israel in 1996, Magnolia claims to be the world’s largest retailer of sterling silver jewellery, with more than 150 stores in North America, Europe, the UK and Australia.
The company opened its first Australian outlet in Bondi Junction in 2005 and has since grown to27 outlets across NSW, Victoria, Queensland and WA with plans to open “another four to eight stores” by the end of this year.
“Our silver jewellery is popular because it is affordable and fashionable,” Harpaz says.
“People buy gold jewellery if they want to wear something expensive but it is not a fashion accessory as people do not match it to what they wear.
“Silver jewellery is however a fashion accessory as people do match it to what they wear.”
Harpaz argues that customers’ differing attitudes towards gold and silver jewellery are evident in the buying process where the weight of the metal is a major factor in determining the final selling price in a gold item but not in the final selling price of a piece of silver jewellery.
“Although silver is a precious metal it is not as expensive as gold so when we price an item the value of the artwork and the design plays a greater role in determining the final price.”
He further explains that Magnolia meets the needs of women who want to wear something fashionable but don’t want to wear something that “looks like a $5 item” from Diva or another similarly positioned jewellery/accessory outlet.
“We sell quality jewellery,” he says. “All our jewellery is handcrafted and set with semi-precious stones.
“We have approximately 2000-2500 designs available at each store at any one time with around 500 new designs arriving each month.”
With an average retail price of “around $70” per item, Magnolia has certainly captured the attention of shoppers who want quality jewellery but are not interested, or are not prepared to pay for, gold jewellery.
Furthermore Magnolia and Butterfly Silver are not the only businesses interested in this market segment – increasing numbers of fine jewellery stores are now stocking sterling silver and, in turn, increasing numbers of silver wholesalers are helping them stock their shelves.
The last five years have seen the arrival of several new silver jewellery wholesalers/brands including Thomas Sabo, Georgini, Spinning Jewellery, Ellani Collections, Legacy and Lapponia.
Like their more established counterparts, the new silver jewellery wholesalers argue that jewellery retailers should embrace silver jewellery rather than dismiss it as not-so-fine jewellery.
For example Paul Hicks, co-director of Ellani Collections with his wife Tracy, believes that a lot of Australian women want to buy quality jewellery that is fashionable and affordable – and sterling silver is the only precious metal that can meet both needs.
Tracy started importing silver jewellery on “a small scale” seven years ago but it is only in the last 18 months to two years that the business has “really taken off”.
“It’s unbelievable,” he says. “We can hardly keep up with the orders. Eighteen months ago we could never have believed we were going to be this big but we are because people want to buy good quality sterling silver jewellery.”
Imported from suppliers in Europe and Asia, Ellani Collections range retails for “just $50 to $300 an item” but “looks like fine jewellery”.
“The silver looks like white gold (as it is rhodium-plated) and it is set with triple cut cubic zirconia.”
Hicks believes the main reason behind silver jewellery’s increasing popularity is the increasing fashion-orientation of the jewellery market.
“Where women once tended to buy one nice gold ring and wear it to death for 10 years a lot of women now want to put on a different ring or pendant every day to match their outfits.”
He says that although most retailers want to put gold and diamonds on their shelves “because there’s a bigger dollar value on each sale”, good quality silver jewellery will provide them with “good turnover”.
“Everyone wants something nice without spending too much.
“Jewellery retailers are always going to get the gold and diamonds sale for the wedding or wedding anniversary customer but if they want the impulse sale they have to offer customers silver jewellery that looks goods and offers value for money.
“I have no doubt that silver jewellery is going to increase in popularity as the gold price will no doubt continue to go up and consumers will continue to become increasingly savvy and look for bargains.”
Maria Vella, the marketing manager for Iconic Jewellery, the distributor of Legacy jewellery in Australia, is equally convinced that silver jewellery is set to gain an increasing share of the jewellery market.
Launched locally in June last year, Legacy offers sterling silver necklaces, bracelets and rings that can be customised with names, dates, phrases or a personal message.
Maria says the range, which is designed in New York, has been “greatly received” by retailers and customers alike.
“I think silver is the new gold.
“At one stage silver was the poor cousin to gold but it’s not anymore as gold is out of reach for most people who want to keep up with trends.
Moreover, Maria argues that silver’s recent price rise will actually make silver “more attractive” to many people who will now perceive it as a “more precious” precious metal.
“Tiffany’s uses the same sterling silver as everyone else but can charge so much more because people are happy to pay for the sentiment of exclusivity.”
Similarly, Natasha Ree, the director of Lapponia Australia, another newcomer to the local market, is convinced that silver’s current popularity is set to rise even further.
“For many years now I think that white metals have been the popular choice for the majority of people, reflected in the high number of white gold or platinum engagement/wedding rings chosen by men and women,” she says.
“There has also been a world-wide movement towards white metals, and with the increase in gold and platinum prices we see the Renaissance of silver jewellery – imagine the cost of your favourite silver jewellery item in white gold or platinum.”
Ree, who launched the Finnish brand onto the Australian market in August last year and now stocks its full range of silver jewellery and watches, is extremely upbeat about silver’s future.
“I see the passion for silver continuing,” she adds. “In fact I have heard silver referred to as ‘the new 9 carat gold’.
Meanwhile, the more established silver wholesalers on the local market like Osjag, Pastiche, Silver Creations and Najo, are also enjoying the current growth in silver sales.
“Silver is still very popular and is growing in popularity as gold continues to go up in price,” surmises Craig Symons from Osjag, the distributor of Breuning and Bastian Inverun silver jewellery on the local market for around 13 years.
“There is now an established demand for silver at the consumer level as they now recognise it as an acceptable precious metal.”
He says that although silver has increased in price recently its low starting-base means that this has had an insignificant effect on jewellery demand as it is still dramatically cheaper that gold.
“I don’t see a dramatic change in the market in the next couple of years.
“I don’t see the silver price going up significantly and I don’t see gold dropping dramatically.
“I think we have already had the dramatic growth in silver jewellery so I don’t think it is going to continue at the same rate although it will still continue to claw away at the gold market in general.
“Gold will of course still hold its own in terms of higher diamond content jewellery because metal becomes a smaller portion of the end price when diamonds are involved.”
Stuart Power, the principal of Silver Creations (the Australian distributor of JC Hurst silver jewellery including bangles, pendants and chains) also believes that silver’s affordability is one of its major attractions.
“One of the main factors in silver’s popularity is that the intrinsic value of the metal has risen, being more affordable than gold,” he says.
“Consumers see they are still purchasing heirloom pieces in a precious metal. As such silver will continue to increase market share due to affordability and fashion trends”.
Laurian Ryan from Pastiche, established for 25 years, which wholesales sterling jewellery featuring “bold, modern and classically sleek” designs with many pieces featuring cubic zirconias and gold-plated finishes” agrees.
“Silver jewellery has always been popular and admired for its beauty,” she says.
“At the moment there is an even greater interest in the metal due to its affordability and an increasing consumer appreciation of the quality and worth of silver.
“Affordability places silver jewellery in an envious position to consistently be introducing new, bold designs in an industry focussed on the contemporary and imaginative.
“As the price of gold keeps climbing, silver will undoubtedly increase its presence in the market. Consumers will continue to appreciate the quality of silver and invest in pieces that are affordable and will be possessions to be treasured – as opposed to fashion jewellery which is trend based and somewhat disposable.”
She believes that the current trend in the silver market is a move towards jewellery that “is striking and different as consumers continue to express their individuality”.
“Consumers are not afraid to wear bigger and bolder pieces and have discovered a love of more imaginative designs. We find that there is a draw towards statement-pieces whether they are clean, contoured high polished surfaces or oxidised designs using interesting surface treatments.
“The focus is on pieces that are outstanding, innovative and desirable.”
Jo Tory from Najo, arguably the most established silver jewellery wholesaler in Australia is also confident that silver will continue to gain market share – due to its colour, modern designs, affordability and its “fashionable element”.
“I think that the comparative price of gold to silver will increase silver’s market share. (that is, it’s affordability). Having said that, the increase in the price of silver also will make it a more aspirational purchase.”
“Silver designs will continue to follow general fashion designs… I think that the charm and bead era has been so saturated that silver fashionistas will want to see something different.”
And that is no doubt true even, if like the GFMS suggests, the silver price keeps rising.
Silver’s buoyancy is “very much still alive” with the price having shot up to over US$36 in early March this year, concludes the consultancy’s report.
“Such levels suggest the annual average could easily reach an all-time high this year.”.