FINE JEWELRY CONSIGNMENT; A NECESSARY EVIL?

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Let me give you some back story in a New York minute. I am a designer, originally from Hong Kong. I was educated in London, where I trained as a jeweler. I went to the right schools, had the right internships, worked for the right people. By every common standard I felt like I had a leg up in the world of jewelry, not necessarily thanks to my ‘talent’ as non-designers put it. I’ve never seen my ability to design as a particular skill, it’s just something I do—like how you drink coffee, uncomplicated and routine.

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I arrogantly decided in the summer of 2013 that I would start my own fine jewelry line. In my mind it was a simple path. Design a few pieces, reach out to buyers, and hey presto I’m the new sensation at Barneys and the CFDA is begging me to join their exclusive enclave of designers. I knew it was going to be hard work, but I had no idea what I was in for. I write this not as a tell all but as a warning to others to really think about what starting a brand entails and if you are ready for many failures. I would have liked someone from the industry to have told me the truth about what they go through, rather than keep up an amazing social media facade small brands feel the need to put on—myself included.

I designed Vertigo in a day. Super psyched, it was going to be the new shit. It was a collection based on the urban grid of New York. Super wearable and super easy; only five pieces to start with and then I would expand from there. I did my research, found the emails (or managed to piece together emails) for buyers in the top retail locations: Barneys, Bergdorf Goodman, colette in Paris, etc… I went global, sent my look book, brand book, line sheet...everything was organised and ready to go...but I got zero response. Ok ok, no worries let’s try this again with a showroom, I thought. Maybe they have closer connections and would be able to offer insight. Little did I know this was the fateful move. There is so much to say about showrooms (but in this article it is about my journey on consignment….so moving on!)

Long story short, the showroom I was with felt that five pieces were not enough to show buyers, so I expanded to 15 pieces. I lacked scale so made five more larger pieces; I lacked color so added 10 more pieces with color; I lacked the impulse buy so added five more pieces. At the end of all my buyer appointments—while I had wanted to launch with a five piece collection with one knife edge detail that would define the look of the brand—ended up being a 45 piece collection that I did not even want to design. Being a new designer I took the buyer’s word for truth, thinking ‘well they are the professionals they must be right or knowledgeable about the market,’ right? Well, my darling dearest designers, this is rarely the case. Buyers buy from previous track record of what works and very few have the foresight and trend knowledge to know what the next new trend is. Buyers often get new brands in as show stoppers, knowing they will not sell but will draw people into the case line to view before on to something more commercial.

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I wish I had enough conviction in my own brand to have just sold the original five designs and stuck with that for a few seasons. It was my lack of confidence and sheer desperation to please the buyers that made me make terrible choices. There are many brands out there who have stuck to just one product. Spinelli Kilcollin for example and Hoorsenbuhs only started with one ring—genius! One style and that was it. Anyway I digress, back to consignment.  The main concept of consignment is that buyers will choose a selection of jewelry from your collection. Often they want exclusive colors and styles specifically for their store. This works for major brands where a Gucci style cuff can be purchased only in a specific color, but for small fine jewelers I feel this doesn't quite work. Making smaller brands customise a piece specifically for one store is not great for brand building because you are moving away from the brand aesthetic and taking on the stores. So, after the selection of how ever many pieces the store wanted to have, I packed the selection up and shipped it to the store. The deal is the store would send out monthly reports on what sold and based on these reports I would know how much to invoice the store. But, the stores all have different return guidelines. Normally it’s 30 days, so let’s say January 1st they sell a piece of jewelry, it shows up in the February 1st report but I cannot invoice them until March 1st in case the customer returns it. I send the invoice March 1st and wait until April 1st to get paid, but April 1st comes and goes so I chase up the invoice and everyone is a late payer (seriously...everyone) so I don’t get the check till June 1st and a portion of that invoice goes to my showroom.

After the re-launch of the 45 piece collections, small stores became interested. And guess what, they picked less than 10 pieces to consign. After lengthy conversations with my showroom they tried to convince me that buyers need to see a range of styles to see what suits them. Which seems logical, but isn’t great when you are trying to build a brand aesthetic. By the end of the season I was stocked at London Jewelers, Roseark, Plukka in Hong Kong, Broken English and in a Brooklyn boutique whose name I’ve since forgotten. From the outside it seemed awesome. Yes, I had seemingly great retailers, but here was the real situation. I used all my savings to make the 45 piece collection and pay the showroom a monthly fee which i didn't have to start paying until a few months into our relationship. I had to borrow more money to afford to consign to these stores and worked four freelance jobs just to pay rent. It was not a happy situation. Buyers know as a young new designer you need them more than they need you. So they pay whenever they want. I remember the buyer from an LA store I was dealing with tell me that ‘yes, my invoices are net 30,’ but the 30 days counts when she gives the invoice to her accountant, not when I give her the invoice. So payment was usually 90 days…. Stores do not pay for anything so I had to Fedex and insure all the jewelry myself. Anytime a client broke something when trying it on in the store I had to pay for the shipping, the repair, everything! The store refused to pay for any of it.  Half an earring would go missing and whoops you need to replace it because the store staff do not know where it went and guess what, the store is not paying for a replacement. Another landmark store on 5th ave. wanted to place an order of $100k - Awesome right? Well, no because I was told I’d only have 24 hours to replenish the case meaning I needed another 100K in back stock. I clearly forgot to tell them that Daddy was not Bill Gates but that did not seem to worry them.

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In the boutiques where I was stocked, I would regularly check on the sales team to make sure they had everything they needed. I created cheat sheets for them to learn the collection but of course, no one used them. I even offered a sales commission on my end for the sales but it did not matter because it was much easier to sell Anita Ko or David Yurman, so why bother with a small unknown with limited press.

Long story short I had to take my brand out of the race. I simply could not afford to compete against brands who had the funds to consign, and was now laden with a mass of debt and inventory I could not  sell. One the of the most poignant moments was when I had to take a few pieces down to 47th St and sell them for their gold weight so I could pay rent. An earring that retailed for $1500 was only worth $120 in scrap metal.  

Here is one of my two cents and it might not work for you, but this is advice I wish I had received before I started: Buyers never buy from the first season, and they don't really get interested in the brand until after 3 - 4 seasons of seeing you’re still surviving. Because hey, if you survive for 3 seasons you probably have a real customer base they can begin to exploit and a better chance of sticking around. Unless you have serious cash in the bank do not go down the consignment route. There are stores that still buy (none of them were interested in my collections). If you do consign make sure you are fully aware that you won't be paid on time so consign wisely and make sure you are not dependant on that invoice you hoped would come in on time because it won't. Buying fine jewelry is an investment for stores but with consignment the stores no longer have the drive to sell the jewelry because if it does not sell, they have only lost floor space, not actually dollars. I feel a fairer situation would be for the store to purchase 50% of inventory upfront, leaving the other 50% to be consigned. At least the designer is paid a little and have enough cash flow for the next season. I tried to implement this with a few stores but was outright denied.

The other of my two cents: Stick to your own convictions! I am not saying be stubborn beyond belief, but believe in what your brand represents and don’t make choices out of desperation to sell, which was my main mistake. Seems like easy advice, but when it’s crunch time, that trigger on the barrel seems pretty sweet.