Peter Jackson left school at the age of 15 to start work at his grandfather’s jewellery business before taking the leap of faith in 1982 to start his own shop in Preston, Lancashire. Over 35 years later, and now running four stores in the Northwest, Mr Jackson, the owner of Peter Jackson The Jeweller, talks to WatchPro about the challenges and opportunities of selling watches and jewellery in the region’s smaller cities and how personal service makes up for scale and blockbuster location at the affordable luxury end of the market.
WatchPro: Tell me a little about how you got started with the creation of Peter Jackson as a business, and what inspired you to create your own jeweller?
Peter Jackson: I was never very patient at school and my grandfather was in the jewellery business while my father was in the automotive business. Jewellery was always more appealing to me than cars, so I always used to go into my grandfather’s shop and help out from about the age of 12. I left school when I was 15 and went to work with him. I was always very keen to learn hands-on, rather than from books. If you show me how to do something I have always been really keen to look and learn from more experienced and wiser people. Pretty much everything in my career has been learned this way.
In 1982, when I was far too young, a shop came up in Preston; a small shop that was having problems. Before I knew it, we had done a deal and I had my first shop. My family helped and I borrowed money from the bank, and off I went.
WP: 1982, you are talking about a time in the depth of the darkest years of the Thatcher government when the North of England was far from booming. That must have been a risky time to start a business, or did you see it as an opportunity.
Peter Jackson: A bit of both. I had confidence in myself — probably too much as at that age you think you know everything — I had the desire to succeed, I loved customer service and to look after people, I enjoyed selling and I thought there was a gap in the market. I saw a jewellery store that had failed and I thought that I could do better. It turns out that I could and I did. It was incredibly hard work, but I enjoyed it and my total focus was on growing the business, paying off my debts as fast as I could, and building from there.
A few years later I got hot feet and felt it was time to expand the business, so we opened a store in Blackburn in 1988, then next was Southport, then Carlisle, then Bury, which was our biggest and most ambitious project that we opened about six years ago. Plus, we have now opened with Thomas Sabo here in Preston.
Last year I closed the store in Southport. It was a very difficult decision to make. I held on for a long time because I was very concerned about the staff. That was a big issue for me, but I came to realise that I had to make the tough decision. The town was not right for us any more, the business was not working there. I looked for opportunities for all the staff. Two of them found jobs elsewhere, the manager from Southport, Danny Bond, is now very capably looking after the ecommerce side of our business, better than it has ever been done before. Olivia is working in my office in the stock department, and Philippa, the assistant manager, decided to go back to university but she is still working with us at weekends.
WP: What has the Southport experience taught you about the wider challenges in the market right now?
Peter Jackson: Southport was a good indicator of how the retail landscape is today. There is a massive oversupply of retail space in the UK, and I think that successive governments have focused more on the next general election than on what is good for the country. Towards the back end of the John Major years and the early Blair years, the retail business exploded; there was more and more retail space being added at a time when the population was not growing as fast and the internet was coming along.
Right now you maybe have 40% more retail space than we had 30 years ago, but only 5% more people, and you have the internet, so the whole thing is not sustainable.
Look at what governments have allowed to happen, for example the Trafford Centre so close to Manchester and Liverpool. That should probably never have been built. It killed a lot of small towns around Manchester.
If you look at where we are with our store in Bury, we are surrounded by Oldham, Rochdale, Bolton; four decent sized towns all very close together, but there is not enough business for all of them to succeed. Fortunately, we are in the town that appears be doing best, which is Bury.
WP: Are all of your shops in prime locations within shopping centres?
Peter Jackson: Yes. My grandfather always said to me that there are three things that matter in retail: location, location and location. There are some exceptions with jewellers that have built their reputation over generations, but I don’t think you could open anything new today that wasn’t in a prime location.
Even in the busy areas, footfall is not what it used to be. When I first started, shopping centres were busy all the time. When late night shopping started, and I think Preston was one of the first places to do late night shopping in the run up to Christmas, and you could not move in here.
The town was heaving. But now there are so many more places for people to go and so many more places to spend their money. They are spending so much more on holidays and eating out and other experiences than ever before, so there may be more money around than there was back then, but there are lots more places to spend it.
WP: How do you adapt to the current market, and prepare for the increasingly rapid changes coming towards us?
Peter Jackson: We have to be better and sharper at what we do. We are pretty good, but we have to be better. Ecommerce has started growing. I was late to it because I want people to come into our shops and get the full Peter Jackson the Jeweller shopping experience. But not everybody wants that. Some people want to sit at home and do their shopping, some people are so short of time.
WP: How long did you hold out for before making your website transactional?
Peter Jackson: We have been going quite a few years. I realised I could not continue to just promote the shopping experience of coming into our stores. Also, while a retailer in Bournemouth, Aberdeen or anywhere in the world is selling to my customers in Preston and Bury, so I need to do it the other way round.
The internet has made another change to the retail landscape. In the past, jewellery and watch brands gave their retailers a territory to sell to. That can’t be sustained anymore because there is no such thing as a territory online.
I think in the stores, we have to work on the experience we are giving to our customers. I believe we have always been really good, but we have to be better.
WP: The world is changing so fast. I lived for ten years in Dubai and watched it grow from a town the size of Peterborough into one of the foremost shopping destinations in the world, with incredible mega malls that pull people in from across the world. They are also central to the lives of people who live there with entertainment, leisure, shopping, eating, all in air-conditioned splendour. Could this country learn from that concept?
Peter Jackson: It does not have to be on that scale. If you look at Altrincham, a small town outside of Manchester that was killed by the opening of Trafford Centre. The local authority got its act together and turned a derelict market hall in the centre of town into what is now a thriving street food market, and that has inspired the whole town to become a foodie destination with more and more independent places opening up. The place is heaving now every Sunday. Each town has got to give people a reason to come in and shop.
WP: The term ‘destination’ is overused, but it is crucial in today’s market, particularly for businesses like jewellers. You cannot afford to just pull in customers from a radius of a few miles, you have to pull them in from across the country.
Peter Jackson: The opposite is also true. Some towns are becoming destinations while others will contract. Southport is an example where we had to withdraw and David Robinson also closed [in April this year]. Southport has two high streets, but the future for the town is probably for one of them to go back to residential. It cannot survive in its current state sandwiched between Preston and Liverpool unless it does something. That is the case with all towns.
WP: Jewellers seem to need to get bigger in the locations they focus on. David M Robinson is a good example: having closed in Southport, it is doubling the size of its central Manchester store that can become a destination store. Is that a direction you might adopt?
Peter Jackson: We want to be the strongest jeweller in every town in which we operate. We are not in the big cities, we are in the large towns or the smaller cities. That works for us because we are very involved in the community, we do a lot of charity work; we want to be part of the community. The big multiples don’t work as well in the towns and smaller cities because they do not make that personal connection so well with the community. They do best in the big cities and the major shopping centres where they put on a really big and special offering.
WP: How does your business break down across all stores in terms of jewellery and watch sales?
Peter Jackson: I think now we are around 55/45 watches to jewellery. Watches are very important to us; branded products are very important to us, but it is vital to get the balance right. The brands spend huge amounts of money on marketing, and we get the benefit of that, but we don’t get the margins. With generic products, we have to do all the marketing and promotions. The art is to balance everything and bring a really great offering to our customers.
I know there is this scramble in the trade to get certain watch brands, but it is important to us that we have brands that reflect who our customers are. We also want to make sure that we do good business for each of the watch brands we have. If you have too many, it is very difficult to make the right commitment to all of them, particularly when they are competing brands.
WP: Have watches always been the larger part of your business, or is that quite a recent thing?
Peter Jackson: Watches have certainly become stronger over the years, and the big brands are incredibly important. The relationships we have with those big brands are also really important. They have come under a lot of criticism in recent years for the way they have treated, particularly, independent retailers, but I believe they have the right to protect the integrity of their brand, and the right to decide how they want it portrayed.
A lot of the brands’ biggest customers, the major multiples, put them under a great deal of pressure to work with them in certain stores and squeeze out independents. Some brands stand up to that pressure, others don’t. We have seen with some brands that they have reduced the number of doors so that they have fewer, but stronger, accounts. Other brands have gone the other way and carried on growing, sometimes too much.
WP: I think we may have reached the limit of the strongest brands adding more and more doors. I think they will work with their best-performing retailers and persuade them to give them more space, better positions in the store and the window, better stock holding, better branded displays.
Peter Jackson: That is tricky. There has been a trend to have more and more furniture in stores, but I do not want to look like the ground floor of a department store where you go in and see all the same branded cosmetics concessions, but the customer does not even know which department store they are in. Our philosophy is that we will give the most space to the brands that perform best for us.
WP: I see in this Peter Jackson store in Preston that you have given the biggest and best space to TAG Heuer. I assume that is a direct result of the brand’s success, or is it also a positioning statement for the type of customer you want to attract?
Peter Jackson: It is a bit of both. TAG Heuer is our highest turnover brand, and that is reflected. Another well-known luxury watch brand was keen to work with us last year, but one of their demands was for the same space that TAG Heuer has got. My answer was that they would have to earn it first.
WP: You are close enough to Manchester here in Preston to be affected by the pull of the TAG Heuer monobrand store in the Trafford Centre.
Peter Jackson: We are, which is why we have to work even harder to convince customers that they will be looked after by us in this small city better than they will be in Manchester. We can build up a personal relationship. Your question is absolutely right: why should somebody buy a TAG Heuer from a multibrand store when they can go to a monobrand store? It is about relationships. There is nothing the customer can get in the TAG Heuer store that they can’t get from us, and I hope we can also give them extra customer service. That is a really big thing for us.
WP: What do you think of the trend for major watchmakers to roll out their own direct to consumer boutiques and ecommerce sites?
Peter Jackson: I have always believed in a golden role of business that brands should not compete with their own customers, which in most cases is retailers like us. But it is happening everywhere now. Some of them are saying that they will open their own stores at the same time as working with channel partners, others are inviting people to work with them to open monobrand stores in partnership. For me, the latter is a better model. When you see a brand that has its own store a short distance away from one of its customers, I do question the of that.
WP: I think it happens less in this country because the multibrand players are so strong. You see very few directly owned and operated monobrand stores outside of London. They are almost all done with partners.
Peter Jackson: That is right. The situation is quite different in the United States and Europe, it is very rare that you come across stores that are the same quality as our better independents or multiples. Consumers are demanding more impressive stores today in this country. When you go towns like York, Altrincham or Harrogate, where there is a very strong independent sector, you find even small independent retailers have really raised their games.
WP: The minimum cost of survival has risen dramatically.
Peter Jackson: I agree with you. People are spending more money than ever before, so the business is there but we have to work in different ways to get that business. We have to recognise that our competitors are not just other jewellers.
It would be great if the industry could get together to promote the idea to consumers that spending money on jewellery and watches is just as enjoyable and rewarding as spending money on holidays, cars and eating out. Why aren’t our trade associations taking the lead and investing in creating demand. We have an umbrella organisation, the NAJ, but it needs to be doing more to support the jewellery trade.
WP: You strike me as a realist rather than a fantasist waiting for somebody to wave a magic wand, so what are your plans over the coming years to adapt to the current conditions?
Peter Jackson: For now we are consolidating and trying to get better at what we do. If the right opportunity came up, then of course I would look at it. But I want to focus on right now is doing what we do as well as we possibly can. I want to encourage our managers to be better, our teams to be better, but also our towns to be better as well. We try to get involved in the affairs of our town centres and influence the direction they take. I think there is room for growth in what we have got now.
WP: How do you feel about competition from the grey market? I looked in your window on the way in and saw a TAG Heuer Monaco on sale for £4500, but it took me 20 seconds to find the same watch online, brand new, for £3500 on the secondary market.
Peter Jackson: The grey market is not good for business. Some of the brands that claim they are trying to stop the grey market are actually perpetuating it. There are many examples of a brand expecting a retailer to spend too much, more than they are comfortable spending, on stock. The retailer is scared that if they don’t buy the stock then they will lose the brand, then they have too much stock and have to clear it somehow. If somebody comes along and says they will take half of that unsold stock for a 10% margin, the retailer is likely to take it. The next thing you know, those watches are on sale at prices that undercut the authorised dealers. The big brands could stop this happening, but you get the feeling that as long as they are selling product, then they turn a blind eye to how it is being sold.
There will always be some grey market, and people happy to buy watches that way, but as an official retailer I will always say we can offer something that you cannot get from an unauthorised channel.
WP: It seems to me in this day and age this is a solvable problem. The big brands should not be forcing stock on retailers that cannot sell it, they should be restocking retailers all year round once watches have sold through. This would help retailers tie up less cash in stock, they would have the right stock for their customers, and it would dramatically weaken the grey market.
Peter Jackson: There is something grubby about the grey market and I only want to sell what I am authorised to sell. We have expertise in the brands we sell and we can provide fantastic customer service.
To answer your question more directly, the brands that have the strongest presence on the grey market could stop it overnight if they wanted to but there are conflicting forces in play. What would happen if Chrono24 did not exist? Authorised dealers that are selling unsold stock would not be able to afford to buy more stock from the big watch companies, so they would sell fewer watches. The big watch companies directly benefit from what Chrono24 does.
WP: Do you dabble at all in the pre-owned luxury watch market?
Peter Jackson: Yes, but only watches that we have taken as part exchange. We service them and sell them again with a warranty. We tried for a time to get more involved in high end pre-owned watches, but it was not a market that we particularly wanted to get into. We want to encourage people to buy new watches.
WP: How have you adjusted to the falling demand for sub-£500 watches?
Peter Jackson: The solution is to stock fewer collections in order to maintain turnover in just the best ones. It is the same with branded jewellery, which is having a rough time at the moment.
We have, I believe, four of the best jewellery brands at the moment, which are Thomas Sabo, Links of London, Gucci and Clogau, and we are concentrating on those. We are offered other brands every week, but we have had limited success with them.
Watches and jewellery are the same. We could have 50 brands in the store. We would not sell more, we would just spread the money more thinly. You cannot have too many directly competing brands, you are better to pick the best and be expert in those.