Baubles Galore: Luxe Firms Seek Piece of $100B Jewelry Sector

A new gold rush is on as luxury firms look to strike it rich with high-end, branded jewelry collections aimed at fashion customers.

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"These jewelry brands, which were once great and famous for their individuality and craftsmanship, for the integrity of their design, are today just names," De Vroomen argued. "No matter how many millions of advertising dollars you throw at those names today, they will still be production jewelers, making products in large numbers. These brands today are dining out on the past, hoping that it will burnish the current brand image."

De Vroomen, who designs and makes all of his jewelry himself in the workshop below his store, and sells his line at Neiman Marcus and Saks Fifth Avenue, also took a swipe at the "lifestyle brand" concept. "Lifestyle branding is a wonderful thing, but jewelry doesn’t belong in the context of a lifestyle brand," he said. "It has such a long life span. It supposed to get passed down through generations, and it’s supposed to be exquisite in its own right. Brands do not last forever, but a piece of jewelry does."

De Beers’ Lussier said there is room for everyone — branded and unbranded alike. "The branded jewelry business will not dominate the market," he said. "It will have a significant, but minority, percentage of the sector."

The entry into fine jewelry of luxury behemoths like Gucci and LVMH may, however, make it even tougher for the smaller player. Theo Fennell, the publicly-traded London-based jeweler that counts Elton John, David Beckham and Elizabeth Hurley among its clients, issued a warning in early March saying that profits would be below expectations after a "disappointing" Christmas and that full-year results would show a "modest" profit.

De Vroomen, too, conceded that business has been quiet over the eight months since he opened his first freestanding store in London. "I don’t know whether to blame it on the war, the troubled economy, or the fact that I’m new here," he said, "but I’m hoping the worst is over and that things will get better."

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