Italy's jeweller revamps to compete against Asia

A business revamp has helped Italy's former No 1 mass market jeweller Uno A Erre boost sales and partially recover market share, its chief executive said. Uno A Erre, founded in 1926 in Arezzo, a major Italian goldsmith centre, has like other Italian jewellers overhauled its operations to compete with low cost Asian and Turkish competitors.
It was nicknamed by sector insiders a Fiat of jewellery for bringing affordable gold items to practically every Italian home in the post-war period. But like other Italian mass market goldsmiths, Uno A Erre has been hit hard in the past few years by rapidly growing competition from India, China and Turkey which benefited from much lower labour costs and improved quality.
As output fell under pressure from rivals and rising metal prices, Uno A Erre, a manufacturer of finished and semi-finished gold jewellery, shifted to the upper end of the mass market and created its own brand of "affordable luxury", its CEO Gianluca Zucchi told Reuters.
"We strongly believe in this strategy and we see the first positive signs," he said in an interview on Sunday at the international jewellery fair in Vicenza. Still the world's leader in design, Italy has fallen behind India and China in output in the past few years and is struggling against a fierce competition from Turkey.
"This year will be better than 2006 in terms of sales and recovery of market share as well as approaching recovery of profitability," Zucchi said without giving more details.
Uno A Erre, which manufactures 9-, 18-, 10- and 14-carat gold jewellery, was likely to post double digit sales growth on its core foreign markets - Britain, Australia and South Africa - this year, he said. The domestic market accounts for about 50 percent of the company's sales but Uno A Erre aims to boost exports to over 50 percent in the next few years as it sees better growth abroad, Zucchi said.
He expected the company's output to stabilise at current levels of about 20 tonnes a year after it plunged from some 70 tonnes in 1998 - the heyday of Italian goldsmith sector.
But sales would grow as the company aimed to boost value of its product by elaborate design and innovative technology, he said echoing ambitious plans of many Italian jewellers as the sector efforts to turn around.