An Italian family firm with a deep-rooted tradition and passion for the art, craft and savoire-faire that goes into making high quality jewelry is introducing a growing number of consumers to its exceptional, handmade products. Chairman Guido Damiani explains what makes award-winning Damiani and its pieces unique and how even the richest of markets still hold huge potential for expansion.
Can you please give us an overview of the global trends in the jewelry market?
Jewelry is a business that is growing worldwide, especially in new emerging countries that are recording rapid growth in income per capita. A second important trend is the rise of branded jewelry, as jewelry is traditionally one of the very few luxury categories where the unbranded part is higher than the branded one.
Both trends are positive and in terms of industry growth, Asia is definitely the driver. Asia is maturing very rapidly. The “show off” period is already over. Despite the general perception, the Chinese and Russian markets are sophisticated. The world is changing very fast. When these new countries reach a certain level of wellbeing, they mature much faster than in the past. Of course globalization plays a key role. Wealthy people are more global today than they’ve ever been in history. They share more or less the same tastes; they buy the same things; read the same magazines; watch the same movies; shop in the same streets around the world.
The emergence of these new countries on the global scene has made the industry even more competitive. Considering the two rising trends you’ve just mentioned, namely internationalization and branded jewelry, what is Damiani’s current position in the global market? And what is your strategy for the future?
We are a particular company because nowadays the industry is made up of big groups only. Multinational conglomerates are acquiring brand after brand, and in this environment we are still a family company—the family of the founder—that is something special. Nonetheless, Damiani is already among the global names, but obviously with different dimensions because of the different power.
Competition is very high because of the big groups. However, on our side we have the force of being a company that has been doing this for generations, with the passion, know-how, and long-term vision typical of an Italian family that sticks to its name and takes it worldwide.
Damiani is the only Italian goldsmith company to design and produce jewelry from its foundation. We are already among the top 10 jewelers in the world. Damiani is one of the two or three independent companies. All the others are Swiss and French big conglomerates with tens of billions of market cap, so they have a very important financial potential. I am not concerned though. Damiani has the chance to target a certain kind of consumer. Very high-end consumers appreciate our strengths. For instance, the fact that everything is still handmade in the Valenza district where we were born, which is by the way the most important jewelry district in the world.
We grew up doing this. We are the company that received the highest number of design prizes in the world. We receive design prizes every year basically. Damiani can still compete with global groups and we will compete forever, because multinational conglomerates don’t have our kind of know-how.
Moreover, in the jewelry industry there is no economies of scale, because of the cost of gold and diamonds follows global pricing. Basically, you can buy the gold at the same price I get it. With diamonds is slightly different. When you are an industry player, as we’ve been for almost 100 years, you get a bit of margin, but still very small – like 1 to 3 points. And, again, everything is handmade one by one. Therefore, the variation in the number of workers doesn’t lower the average cost. Actually, what is interesting to note in relative terms is that Damiani is actually able to produce at a lower cost than the big conglomerates because of our expertise and deep know-how.
We have done it ourselves: myself, my father, and my grandfather. We are an international brand with a worldwide distribution. We have a store in the most important fashion streets in the world and we are expanding into new countries.
The “Made in Italy” brand is one of the key competitive advantages of the country. What does it stand for in your opinion? And what is the contribution of Damiani in this sense?
The world recognizes that we are able to do things better in Italy. And now it’s not only appreciated, but also underlined. Even, for example, by the French with which we are always in a competition in many categories within the luxury industry. But nowadays, besides the fact that French companies are coming to buy Italian companies, we can see that they produce basically almost everything of the higher-end collections in Italy.
It’s very common to buy Louis Vuitton jackets and read Louis Vuitton Paris, Made in Italy. Consumers understand and enjoy buying products that are made in Italy. It’s synonymous with excellent quality. Our know-how, design, and craftsmanship are the most important things we have in the country.
I hope that our politicians can understand it better, because this is something that should be protected and developed. Our company produces everything in Italy, in the Valenza district. We were physically born there, my grandfather, my father, myself and my brother, and we still have our headquarters in Valenza. The main office of Damiani is still in the same place where my grandfather used to have his small factory. But everything is different now. In fact, the city dedicated the name of the square to my family, so it’s called Damiani Square.
Our Valenza district attracted international brands to go there and produce their own jewelry. For example, LVMH Group and the other brands are building the biggest jewelry factories in the world in Valenza. It will be around 20,000 square meters.
Could you please share with our readers a bit of the history of Valenza and how it became a global hotspot for jewelry making?
Italy has an ecosystem of different districts, which represent real centers of excellence in different sectors. For example, if you focus on eyewear, you will find the area of Belluno in the northeast of Italy, where all top sunglasses of the world are produced—Luxottica for instance. Similarly, all jewelry is in Valenza. How were we born there? Easy, there was a man who taught a couple how to work jewelry. He opened a small factory. Then he taught somebody how to do it, and then they understood that it could be a good business, so it went in that way. Today, Valenza is basically a mono-industry city. 80% of the diamonds in Italy are set in Valenza.
What would you say makes Damiani jewels unique? And what does the American market represent for the future growth of Damiani?
America is the biggest jewelry market in the world, but it is still not our largest market. We need to raise awareness about our history and the importance of our heritage to let Americans understand where we come from, what we represent, and why our quality is superior. Only in this way, Americans will identify us for what we are.
The US is more a market of quantity rather than quality. So for a company like us it is more difficult. First of all, it is very competitive. It’s the most competitive market in the world. What I find surprising is that even if many of the wealthiest people live there and it is the richest country in the world, it is still kind of a new country when it comes to levels of quality. Only a small share of the market is interested in something handmade, with excellent quality and know-how. All American brands, indeed, produce in countries with lower labor cost.
New generations are more interested in traveling around, understanding different cultures, and experiencing higher quality of food. So in the future a brand like Damiani will have more opportunities. We already have good customers, a good market, but we want to grow more. Most of our American customers even prefer to come to Italy to buy and spend time with us. Sometimes we design something special and custom made.
The youngest diamonds are 1 billion years old. And they can go up to 4 billion years. It’s something you can give to your daughter and to your granddaughter, and keep it on. There is nothing that saves its value as much as jewelry. If you buy a bag or a pair of shoes, after a year or two years, depending if you use them, they lose their value. And this is true also for other goods, such as cars and boats.
What I would like to suggest to the Americans is to go deeper, because there is a lot of intangible quality that is important. Especially when it is something that you don’t need for a technical activity. If you are buying something that is for your own satisfaction, a great feeling, emotion, or experience, do it with something really special. Jewels last forever.
What was so intriguing about Venini that you decided to acquire and partner up with them?
We share the same values of Venini, which are: Made in Italy, handmade, a long history, and high quality design. Most of the international museums display some Venini pieces. We see a great synergy because Venini doesn’t overlap with our collection.
Moreover, as always, there is a family connection and a sentimental side. My father was a very big fan of the company. We have many big pieces inside my house.
Damiani is an interesting case study of excellence as it encapsulates the family values on the one hand and the efficiency of a listed company on the other. Damiani is the only company that was awarded 18 Diamond International Awards. You have personally received the prestigious America Award from the Italy-USA Foundation. What does it represent to you?
I was honored to receive the America Award, as it is a very important acknowledgment. It’s good, because it shows that people recognize you when you do something well. For us it is important for the design section, because it is our core business. Recently we also received a prize that is very important to us, which is the Italy Quality that we received from Sergio Mattarella, the President of the Republic. The Italy-USA Foundation prize shows that we are one of the most prominent exporters of the Made in Italy. It shows the value of an Italian company, a family company, with an obsession for value and our history in Italy.
Our target is to always represent a high-end position, which means that we will never do mass figures, because that also means mass production. So we know that these figures can only increase to certain point if you want to maintain a certain level of quality, distribution and exclusivity. You need to remain exclusive because being for everybody is another job with different dynamics and a different kind of competition far from what we do.
Our goal is to grow by keeping the same values, which means that we commit to maintaining a high quality of materials, design and manufacturing. We are committed to giving our customers what we truly believe to be the best jewelry in the world.
There is a picture of me when I was three years old with a magnifying glass watching diamonds. We grew in this way, with our father and mother speaking all day long about the jewelry, and spending even the weekends at the office. And we were children, so we went there with him. We want to keep this, because it is something very important. Financially, being listed gives us some fresh air, but to achieve excellence, we rely on our family values.