Golden Heritage

The rings made by Patrick Yuen Hin-tai and Vanessa Yuen Lai-lam are as unique as their relationship. Plenty of love has gone into producing the bands – a reflection of the bond that the father and daughter share.

In times when most jewelry is fashioned by machines, the Yuens belong to a tiny group of local goldsmiths who are still designing and crafting their pieces by hand. Most of the tools used for chipping and engraving are rudimentary. Only a few are electric.

“Not many people in Hong Kong are still making jewelry full-time like my dad does. Many goldsmiths have either passed away or switched to becoming security guards or taxi drivers to make a better living,” Vanessa said.

The senior Yuen, now in his late 60s, entered the goldsmithing profession through a cousin’s introduction five decades ago. He is a bench jeweler, specializing in patterning jadeite, diamond and pearl pieces.

“In the old days, we needed to pay the boss a guarantee to work as apprentice. As apprentice, we received a pittance of HK$10 a month. That was one- tenth of what I made when I was still working in a textile factory in 1966 or 1967,” he recalled.

Entry barriers were high, but the trade promised good prospects before its decline in late 1980s. Tse Sui-luen, founder of the eponymous label, made his fortune as a bench jeweler. The jewelry chain is now a listed company, with a market capitalization of HK$620 million.

Two other success stories are David Sin Wai-kin, chairman of Myer Jewelry Manufacturer, and Cheng Yu-tung, the late patriarch of Chow Tai Fook. Both expanded their reach to properties and hotels.

“Goldsmiths were considered prime husband material,” the senior Yuen joked. “During the most prosperous years in 1987 and 1988, I was making HK$30,000 to HK$40,000 a fortnight. A two-room flat in Tuen Mun then cost about HK$400,000.”

He now runs his own workshop. His daughter, a fashion and carpet designer, joined the family business and started an in-house label, Vanessa Bell, two years ago.

“I quit my job in 2014 to go on a working holiday. When I was in London, I became an apprentice at a shop selling hand-crafted jewelry. That made me realize an interest in my dad’s work,” Vanessa said.

“I named the label after a park built in remembrance of the painter Vanessa Bell. I walked past that park every day in London. My customers and I have very similar tastes. We like simple, affordable, vintage-inspired 18-karat pieces that can be worn daily.”

Vanessa designs all the pieces, and her father realizes her creative visions. The Vanessa Bell series comprises mostly rings set with gemstones, with a few bracelets and earrings. All are made to order. A simple ring, priced from HK$1,400, can be made in one day.

Her father also makes crowns, pendants, bridal bangles, and engagement rings – which can come to HK$600,000 a piece. More intricate designs can take six months to finish.

“My dad and I have vastly different tastes in jewelry. But he never second guesses my vision.” Vanessa said. “We do argue about the design. He might think that the stones I choose are too small, or the ring is not chunky enough. But I will press on with my ideas.”

The two complement each other. He contributes artistry and experience while she brings in fashion sense and online marketing skills.

“I get anxious when business is bad,” she said. “My dad taught me two things. First, it takes a full year for results to show and second, some will like my design, some won’t.”

Vanessa is full of praise for her father. “My dad is a shy person. He never tells others what he has done. I know he is secretly hiding away some bridal bracelets,” she said. “He made me a ring when I was 18. Since then, my sister and I get a birthday gift from him every year. His gifts will be our dowry.”

He said: “I am a goldsmith. Naturally, I want the best jewelry for my daughters.”

“If my boyfriend proposes, I will want my dad to make my engagement ring,” she said.

The article first appeared in the Standard on June 16, 2017.

Brilliant Tactician

Ioannis (John) Begietis may be known as the numbers man for FF Group, a family-run fashion company that owns the Folli Follie and Links of London labels. He’s the company’s global chief financial officer, and chief operating officer at its Asia-Pacific headquarters.

But little do people know that the Greek is, literally, a present-day Spartan warrior.

He’s descended from a historical military family that can trace its roots back to the reign under Leonidas, the Spartan king portrayed by Gerard Butler in the 2006 film, 300.

Begietis and his brother are the first generation in the family who have exchanged spears and shields for spreadsheets. “Some say my forefathers were the descendants of King Leonidas. My grandfather was an army general. My father was an admiral in the navy,” he said.

“I joined the national service right after my studies in the United States. I was in the air force as a finance officer for two years. I got to try some new anti-aircraft weapons and really cool guns,” the 50-year-old recalled.

Undergoing a different rite of passage – marked by expat assignments in the business world – Begietis relocated to Hong Kong in 2011.

He now oversees about 320 retail stores in East and Southeast Asia, and his main responsibilities include the overseas expansion of Folli Follie.

Folli Follie has been expanding rapidly in Asia, with the Asian market now contributing significant revenues to the Athens-based FF Group. Its annual sales have risen from 300 million euros (HK$2.54 billion) to 1.3 billion euros in the 11 years since Begietis climbed aboard.

In Hong Kong, the label has accelerated the pace of setting up stores in prime shopping districts. Last October, it opened a new outlet store at E-Max WearHouse in Kowloon Bay, followed by another at Florentia Village in Kwai Chung in March. This summer, it plans to add two or three regular stores in the SAR.

Including locations at Horizon Plaza in Ap Lei Chau and Plaza Hollywood in Diamond Hill, Folli Follie now has four outlet stores in Hong Kong.

In the past, brands opened such stores to liquidate unsold inventory but modern practices are changing. Outlet shops form a part of the present-day omni-channel retail strategy of top fashion labels. They stock not only past-season items, but also special collections.

An example is Japan, where Begietis has restructured the Folli Follie brand after the acquisition of a joint venture partner in 2008. A new marketing image and merchandise offers helped the label recruit young female office workers as loyal customers.

“In Japan, we have a sizable number – 16 outlet stores. They are located far away from the main cities. They have not overtaken the local market sales, but are a very profitable segment,” Begietis said. “The most successful outlet venture usually happens in a mature market. You have to have a clientele who knows what the full price items are, and can differentiate them from the special lines or discounted items.”

In the local outlet stores, past-season items account for only 15 percent of the entire catalog. They are sold at a minimum 30 percent discount. The rest are specialty products: for example, men’s watches exclusive to the outlets.

Begietis intends to use the stores to tap a new clientele, and slowly lead them into adopting the habit of purchasing full-price items.

“Everybody talks about the retail business going down, but nobody talks about the local people as a shopping power,” he said. “They are all looking at the tens of millions of travelers coming, which is fantastic. But it’s a chance business. So local customers are always our target.”

Begietis relies on his staff to keep a finger on the pulse of the market. He is one of the few expatriate managers who work at the group’s Asia-Pacific headquarters in Hong Kong.

“I am a tactician. Retail is like chess. You should always make the right steps to go to the top. Of course, when you play a game, you should prepare to lose. But nobody plans to lose. Everybody plans to win.

“I think you have a better chance of winning if you involve the local people. This is true, not just in Hong Kong but everywhere.”

The article first appeared in the Standard on May 12, 2017.

A-List Couple

Shopping is a national sport of Hong Kong. So is lining up. If you merge the two together, you will get a recipe for success — at least according Diego Dultzin Lacoste and Delphine Lefay.

The French couple, who moved to the SAR three years ago, founded a flash sale business, On The List, a little more than a year ago, and have carved out a niche in a city which provides a staggering array of shopping options.

A recent event that Dultzin Lacoste and Lefay organized for British fashion label Ted Baker attracted 1,100 people in just two hours. Bargain hunters started to queue up as early as 6.30 am, waiting for an hour and a half to enter.

“The first time we did Ted Baker was during typhoon signal No 8. We really thought it would be a disaster,” Lefay recalled. “But we received phone calls throughout the day asking when we would open. The queue stretched two blocks.”

“We didn’t expect people would come out and shop but we discovered that Hong Kong people are really shopaholics,” added Dultzin Lacoste.

On The List operates on a business model different from traditional flash sale organizers. It does not have online retail but employs a bricks-and-mortar concept similar to outlet operators.

And rather than opening a store in the outskirts, they eyed prime shopping locations.

Two months ago, they set up a two- story shop on Duddell Street in Central, after a trial run of pop-up events. They plan to have other locations in central Kowloon and the mainland next year.

Another key concept is that On The List serves only registered customers. It currently has a membership base of 50,000 and has worked with many fashion and lifestyle labels – including Armani, Calvin Klein, Ferragamo, and Ports 1961.

Members have access to discounted past-season clothing, fashion accessories, electronics, and wines every week. The markdown averages about 75 percent.

“Each flash sale lasts three to four days. The time period protects the brand’s image. And from the brands’ point of view, they are able to sell all the inventory that they have in the warehouse,” Dultzin Lacoste explained.

The store can move a large volume of goods in days. They once helped Brazilian label Havaianas sell 13,000 pairs of flip flops in four days. “Some companies have stopped organizing flash sales themselves because we can sell a lot more,” Lefay said. “We are not competing with their outlets because we have items that can’t be found there.”

The business model that bridges luxury and mass market retail is not new. Dultzin Lacoste and Lefay got their idea from the success cases in France and the United States. But implementing the idea in a foreign market can be tricky.

It took Dultzin Lacoste and Lefay time to find the right strategy. The pair don’t always agree with one another.

In fact, when Dultzin Lacoste first met Lefay, they had a philosophical debate about rational and impulse purchase. Coming from a background in luxury retail, he valued sensibility over sense while she was in the mass marketing industry and preferred rationality.

“Delphine said her industry had much more figures to work with,” Dultzin Lacoste recalled the night they met. “I told her my industry made people dream. It was not only about the products, but the whole package and storytelling. So we had a big argument.”

Said Lefay: “I was not attracted by luxury brands because I could not afford them. I was 23 when we met, freshly out of university. Now, I can see why people are attracted to luxury products – with a good price. Diego has convinced me.”

Even so, the response from Hongkongers was a surprise. Brands have consigned expensive items, such as jewelry and watches. The most costly was a Frederique Constant watch priced at HK$450,000 before discount.

“The biggest order came from a woman who spent HK$92,000,” Dultzin Lacoste said. “She bought five items: a jacket and some jewelry. If she had bought them at the store, she would have paid a lot more for any one of those items.”

The married couple still fight over their own area of expertise. Said Dultzin Lacoste: “We argue about everything, which is good. But it’s more like we are brainstorming.”

Lefay agreed. “When we want to implement a new process, it always starts with an argument. When I want to insist on my idea, I sometimes don’t listen to Diego. But we are complementary.”

The article first appeared in the Standard on May 5, 2017.

 

Razzle Dazzle

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.