Dusseldorf The Christ jewelry chain has more than recovered from the slump in sales during the corona crisis. “We had an extremely strong 2021/22 financial year, which we closed with sales of 411 million euros,” says Christ boss Stephan Hungeling of the Handelsblatt. “We’re starting the new year with good momentum.” In 2021, the lockdown caused sales to collapse to 344 million euros.
A change of ownership should now ensure a further boost in sales. The financial investor 3i, for example, sells its shares in Christ, which it bought from Douglas in 2014, to the Italian family company Morellato.
The takeover is set to create Europe’s largest watch and jewelry retailer. The Morellato Group grows to a turnover of almost 800 million euros and 620 stores in Italy, France, Germany and Austria. “The merger creates a very strong European player in retail, and together with our online platform we have great growth potential,” says Hungeling.
Christ is to play an important role in the European expansion of the Italian market leader. “Morellato is buying us, but in many areas it will feel like a merger on an equal footing,” says the Christ boss confidently.
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Christ is by far the largest retailer of jewelry and watches in Germany. It makes almost twice as much sales as the family business Wempe, which, like the number three in the industry, Bucherer, focuses on the luxury segment.
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All other jewelry chains are significantly smaller. For comparison: even the international fashion jewelery chain Pandora makes just 160 million euros in Germany.
In an industry study, McKinsey and The Business of Fashion expect an average annual increase in sales of one to three percent in the watch segment and even three to four percent in the jewelry trade by 2025. The generally gloomy consumer mood does not seem to have reached the industry so far. “So far we have not felt any reluctance to buy, but we are very cautious,” says Hungeling.
Online store
30
percent
of sales is already made online by the jewelry retailer Christ – and is thus above the industry average.
Morellato boss Massimo Carraro says: “With its strong stationary presence in Germany and Austria and the innovative e-commerce business, the Christ Group is the perfect complementary partner for us.” Carraro holds 98 percent of the shares together with his wife and brother of the jewelry manufacturer Morellato, which has been expanding into retail for some time and has hardly had any online business so far.
Christ, on the other hand, already makes more than 30 percent of its sales online – and is thus above the industry average, even if you include the pure online retailers for jewelry and watches.
According to the McKinsey study, e-commerce accounted for only 13 percent of total sales in the jewelry trade in 2019, and in the watch segment the share was only five percent.
Shops under the Valmano brand conceivable
Also because of the low online presence, the business of the entire industry collapsed during the pandemic. According to figures from the Jewelers’ Trade Association, sales of jewelry and watches in 2019 were 4.8 billion euros, but in 2020 they fell to 4.25 billion euros.
In 2020, too, it was only able to recover to 4.38 billion euros. The number of dealers has been declining for years and fell again by almost 1000 to 6655 in 2020.
The owner of the Morellato Group sees Christ as a complementary partner.
Hungeling does not just attribute the fact that Christ was able to cope with the corona shock much more quickly to e-commerce. The company continuously invested in the stationary network even during the difficult times. In December 2021, for example, Christ announced investments of a further five million euros in the store network. “We also kept our entire staff together during the lockdown,” emphasizes the Christ boss.
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While the company had slightly shrunk its branch network to 200 shops before Corona, it is now going on the offensive again. “We are now opening more stores than we are closing,” reports Hungeling. “We will gradually build up to 210 to 220 stores again,” he announces. With the new owner, one could also imagine expanding even further.
There are considerations about opening shops under the Valmano brand, with which Christ has previously only been present online. In international markets, this would offer the opportunity to make Valmano better known to customers.
Christ makes 50 percent of its sales with its own brands
An important asset of Christ are its own brands, the expansion of which the company has already promoted in recent years. “Many dealers suffer from the increasing comparability of the brands,” states Hungeling. “We, on the other hand, already make more than 50 percent of our sales with our own brands.” This means that Christ can elude price competition to a certain extent, especially in the online business.
The Christ boss hopes that the takeover by Morellato will boost his company’s growth.
The merger with the company Morellato, founded in Venice in 1930, should bring further advantages. “Morellato brings the manufacturing expertise, so we’re taking a huge step forward in vertical integration,” says Hungeling. By this, the manager means controlling the entire value chain from design through production to sales, as is done by the Morellato Group, which has eleven own and licensed brands in both the jewelry and watch sectors.
The Christ boss also hopes that the change of ownership will give him more long-term planning security. “As owners, private equity companies think in the short to medium term, but that’s different with a family business,” says Hungeling. Morellato is not a temporary partner, but a “long-term home”.
More: Jewelery manufacturer Wellendorff does not want to grow: “We are concerned with excellence, not with volume”