With the price of gold climbing to record-breaking highs, Platinum Guild International (PGI) sees a “huge opportunity,” the group’s new CEO, Tim Schlick, tells JCK.
“We believe platinum is well suited for the present moment,” says Schlick, who became head of PGI this month, following the retirement of longtime leader Huw Daniel.
For years, gold was considered rarer, and therefore less valuable, than platinum. (There’s a reason a “platinum” record is harder to get than a “gold.”) But for most of the past decade, the two commodities have experienced a reversal of fortune. At press time, the price of gold was more than double that of platinum. Schlick says that hasn’t affected consumers’ perception of value, though.
“We were starting to get worried,” he says. “We did research where we asked consumers, ‘Platinum has been trading below gold for a while. Is it really still the best metal?’ What was pleasantly surprising for us, and this was across all our regions, is those metal hierarchies are strongly ingrained.
“And when we ask consumers, ‘Now that you know that platinum is trading below gold, would you still be willing to pay a premium?’ a huge percentage said, ‘Yes, absolutely, because it’s a better metal.’”
Analysts and marketing execs generally attribute platinum’s current lower price to issues in the industrial sector. But Schlick believes major platinum miners will keep investing in the jewelry space, which accounts for about 30% of platinum demand.
“There’s a strong commitment for [jewelry] market development from all platinum producers, regardless of how difficult their business environment is at the moment,” he says. “We did a lot of modeling and found that if you stop investing in jewelry, demand won’t fall off a cliff tomorrow, but it will decline after two or three years. The [platinum] industry is very well aware that jewelry is a mid- to long-term priority that the industry can’t do without.”
For the near future, PGI plans to expand its marketing in the United States, given the problems in the largest platinum jewelry market, China.
“The Chinese market is still in a low-double-digit decline,” says Schlick. “But we see [demand in] India increasing by double digits. In Japan, we see a slight increase. What we see in the U.S., it’s flat to a slight plus at retail. Coming from the ultrahigh [sales of] 2021, that’s a very good sign. If the decline in China continues, the U.S. will become the biggest market.”
The organization is also hoping to make its campaigns “more global,” he says.
“We will always have our feet in our key markets,” he explains. “But that doesn’t mean that we can’t look outside of where we are now. We’re currently [doing a pilot] in the Gulf region, where we’re working with some retailers to put some of our Indian brands into stores, which is working very well. We are looking at what could be the platinum dream market of the future—places like Southeast Asia. We want to find out how to be more active in those market without having to de-invest in other markets.”
Overall, PGI will keep driving “incremental value,” Schlick says.
“To me, marketing is a lot more than just putting a nice billboard up. We’re also very active in training sales staff and teaching manufacturers how to really work with the metal.
“Our core business is to create demand that doesn’t exist,” he says. “That’s our calling. If you look at Platinum Born, our product in the United States, it’s a self-purchase product. That’s a category that’s relatively small for platinum, and we feel that we need to get in these occasions and in these categories to grow the pie.”
(Photos courtesy of PGI)
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