In the eyes of an outsider, Scott Thompson, a long-time Hong Kong resident, had a pretty good stroke of beginner’s luck when the former pilot decided to dive into jewelry retail without any relatable experience.
Even the Briton himself agrees.
“Piloting does not set you up for doing any businesses,” he said. “In fact, pilots are the worst investors next to doctors when they retire. They usually lose most of their money on some crazy business ideas.”
Lucky for Thompson, he was an exception.
His jewelry brand – Carat London – has grown to become a global name today. The brand has more than 250 retail locations worldwide today, employing 140 staff across three countries.
In the last two years, it has opened in over 40 new locations worldwide. It has also ventured into travel retail in Asia after signing up the Hong Kong-based DFS Group. Another achievement is that pop stars Rita Ora, Ellie Goulding, Lily Allen and Lady Gaga all wore Thompson’s pieces.
Thompson, the son of a pilot and a realtor, founded the jewelry brand in 2003 when he was 28. His first retail store was installed in the street of Lan Kwai Fong.
“I saw a sign on the door. So I called up the landlord and did the deal directly. I did not use a real estate agent,” he recalled. “My mother is a very successful entrepreneur. I learnt from her about how to negotiate.”
Not long after he rented the three-story space, the SARS outbreak ravaged Hong Kong. Although Thompson was able to negotiate the contract down to HK$100,000 a month plus a big rent-free period, his friends thought he had gone “completely bananas.”
That’s because he was building the appeal of Carat London on three seemingly discordant propositions: women’s jewelry designed by a man, fine jewelry at affordable price, and laboratory-created diamonds, not natural ones.
“When we first launched the business, everything we did was in 18-karat gold because, back then, gold was quite cheap at US$220 an ounce,” he recalled. “And we were doing very high quality, hand-cut stones.”
Lane Crawford was the first major business customer. In 2008, the brand opened its first overseas shop in Covent Garden. Shop-in-shop deal with department stores Harrods and Selfridges quickly came.
And when wholesalers approached for partnership opportunities, he thought it was time to open more free-standing locations in Canary Wharf and Burlington Arcade in Mayfair.
Good times did not last. As the financial crisis came, Carat London struggled like everyone else. “I saw a lot of retailers going out of business during that time,” Thompson said. “I remember in one particular shopping mall where we had a shop, almost every shop around us went bust, starting with HMV.”
Britain, where 70 percent of its revenue comes from, is a major market. Thompson believes there is still room for the firm to grow there. However, Asia is a different story. While Thompson does want to build a bigger presence in Hong Kong and the mainland, he remains cautious, calling the two markets “an experiment and a proof of concept.”
“The Asian market, and Hong Kong in particular, has been difficult,” he said. “China is okay, not doing quite as bad as Hong Kong.”
This month, he opened his sixth local store in the V City shopping mall in Tuen Mun. The move signifies a new model of operations – venturing into non-core tourist districts to tap “regional opportunities.” A similar strategy will be deployed in the mainland.
Also, the brand has been trying to hasten production, building in faster and trend-driven product cycle to drive customers’ spending. At the moment, it releases six to eight collections – 300 to 400 pieces – every year. That’s almost one item every day.
Thompson has since designed more accessible collections, such as Heroines and Stella, to woo younger women. His wife Heidi, who manages marketing and public relations at the firm, helps out as a sense checker.
“We can’t rely on a single purchase to make our budget. Our business is about agility and tactics,” he said. “We try to be not ahead of a trend, but when something is trending, we hit it right.”
The article first appeared in the Standard on December 2, 2016.