The 2004 edition of OroArezzo, held March 27-31 in Arezzo, Italy, celebrated the 25th anniversary of the show. The event paid well-deserved homage to an industry that has helped elevate Italy to the top of the league of jewelry manufacturers worldwide, particularly in the chain-making sector. The 1,600-plus jewelry firms in Arezzo and the surrounding region account for about 31% of Italy’s total jewelry exports. OroArezzo annually showcases about 600 of the region’s manufacturers, including big names such as Uno A Erre.

However, the “glorious traditions” of Arezzo’s jewelry industry, which show director Franco Fani mentioned in his opening address, are facing challenges on many fronts, not least of which is the dollar-euro exchange rate. But even with a more favorable exchange rate in place, there is still another serious and long-term threat to Arezzo’s position as a jewelry production center. China, India, and Turkey are emerging as producers of low-cost chains and other low- to mid-priced jewelry items that have traditionally been the mainstay of Arezzo’s industry. Although Arezzo continues to outstrip these new producers in terms of the quality of its products, price competition is beginning to have a greater impact in a market sector that is becoming more fashion-led, requiring a higher turnover in styles.

The show’s organizers report that visitor numbers were up by 4.3% overall to 6,668. Of that number, 26% were from overseas, with American visitors accounting for the second-largest number of buyers after Spain. The slight increase in visitor numbers offers some comfort in the face of Arezzo’s 2003 export figures, which the show’s organizers termed “quite disastrous.”

The strong euro combined with stiff competition from jewelry exporters in China, in particular, resulted in a 23% fall in the value of exports from Arezzo last year. “The figures for 2003 are grim—a really hard year indeed,” commented the show’s organizers. A pickup in the value of exports in the latter half of 2003 helped mitigate the 35% fall suffered in the first half compared with 2002 figures. Of particular concern to Arezzo’s exporters was a fall of 33.1% in the level of exports to the United States, which remains by far the largest market for Arezzo’s jewelry manufacturers.

‘Invest in technology.’ During an exclusive interview with JCK , OroArezzo show director Franco Fani outlined the problems facing Arezzo’s manufacturers: “The copying of designs by other foreign manufacturers, competition from countries such as China and Turkey, the weak dollar vs. the euro, and the price of gold.

“Arezzo’s manufacturers operate in a volume market and may have to consider opting increasingly for quality vs. quantity,” he said. Fani believes that design is a key plank in the armor of Arezzo’s jewelry manufacturers, but he stresses that “they will have to come up with new designs more quickly.” Some exhibitors at the show echoed this sentiment by acknowledging that they will have to increase the number of new collections introduced annually.

Above all, Fani says, technological developments are vital: “We need to invest in new technology, especially in the development of proprietary technology.” Unlike Switzerland, which has carefully developed and guarded its watch-making technology, Italy continues to supply its jewelry manufacturing technology to the world, and that has become a double-edged sword.

Another weapon in Arezzo’s arsenal is the area’s drive to improve its marketing efforts. “We must bring the message to the consumer that they are buying into an Italian tradition of quality and style, the concept of ‘Made in Italy,’ ” Fani says. Collaboration with other Italian jewelry centers is deemed an important element of this new approach to safeguard and promote Italy’s export business. The first stage of such collaboration has been arranged between the regional authorities of Vicenza and Arezzo. “Between May and September,” Fani explains, “joint marketing and promotional initiatives will take place in Moscow, Shanghai, New York, and Hong Kong.”

The view from the floor. The current economic climate facing Arezzo’s exporters was reflected in the lack of new designs seen at the show. Delicate hoops, webbed orbs, and other round shapes continued to dominate necklaces, chokers, and earrings as they did in Vicenza at the start of the year. Geometric and square shapes provided a popular form for yellow gold, especially bracelets. Hearts, stars, and hoops with messages and letters also were prevalent, and charm bracelets should continue to be a key trend for this year.

Color themes showed little change from last year, with turquoise and coral remaining particularly strong. However, yellow and orange enamel on rings and bangles showed promise of new things to come, and several exhibitors combined it with black enamel and onyx to striking effect. Yellow gold was more in evidence than last year, but many exhibitors continued to upgrade silver designs through the use of bright enamels and interesting textures.

A tough U.S. market. Anthony Marciano, senior vice president of sales for Metal Marketplace International, one of the largest U.S. wholesalers, commented, “We’ve had a good show and have visited quite a few factories.” Vera Lopez, a retailer from São Paulo, Brazil, comes to Arezzo to buy silver items only. “We buy silver jewelry from Arezzo as the finish is so good,” she explained. “However, we now go to Hong Kong for gold items, as the price points are better.”

Uno A Erre continued to market the “Power of Love” collection that it introduced at Vicenza in January. The company also introduced a new collection of 18k gold mesh chokers and bracelets, called “Nuvole,” aimed at the domestic market, and may introduce a 14k gold version of the collection for The JCK Show ~ Las Vegas.

“The U.S. market remains tough,” acknowledged Uno A Erre sales manager Alessandro Bruni. “The combination of the strong euro and the 5.8% import duty has seen imports by U.S. wholesalers fall. Our high-end range, available through QVC, has continued to do well.” The company’s sales remain firm in the domestic market, although, says Bruni, “the markets for 9k hollow items—such as the UK and Australia—are really competitive.”

Davide Biagiotti, managing director of Dragoni Gioielli, said the number of U.S. buyers was down compared with last year’s figures. Dragoni, which produces mainly yellow gold items and whose jewelry retails for 300 to 1,000 euros, “kept prices unchanged in the U.S. market last year,” says Biagiotti. He believes manufacturers will have to increase the frequency of their new designs to compete more effectively in the current market.

Another company, Maco’s, offers products that retail in the $90-$200 range in the United States. A spokesman for the company said buyers were looking for new designs, adding, “We have not been so badly affected by the general downturn in demand due to the weak dollar. We sell mainly through QVC in the United States, a market that represents about 15% of our total sales.” Maco’s has just introduced a new product range consisting of snakeskin and leather combinations with silver and stainless steel.

Illario, which is traditionally strong on new designs, did not disappoint at OroArezzo. Big, bold silver rings comprising pink, orange, and sky-blue enamel patterns provided a stark contrast to the generally delicate look of items at other booths, and pieces combining pink and black enamel gave off a very Chanel-like feel. Still, “Our U.S. business is down,” reported Illario’s co-owner, Stefania Casi. “We sell out items mainly in New York and Miami, but the climate in general is not good.”