Despite concerns over the increased price of gold, a robust Euro, and more competition from cheaper labor markets, OroArezzo opened to large crowds and busy booths with salespersons attending to buyers prepared to do business.
The trade show opened April 9 and will continue to April 13 at Business and Convention Centre just outside the city of Arezzo, the central city in the province of the same name.
The Tuscan province, with more than 1,600 precious metal jewelry firms (including 1,185 artisan workshops), is one of the most important centers of the world for crafted gold jewelry, and to a lesser extent silver and platinum jewelry. The precious metal factories of the province are well known for innovative jewelry design, which makes this trade show, along with OroVicenzia, very popular among the world’s jewelry buyers. From 1999, to 2004, the number of visitors to the trade show has increased by 45%, reaching 6,668. Show organizers, the Central Promozioni e Servizi and the Italian Trade Commission, expect the number of visitors to at least reach, if not exceed the 2004 figure.
About three-quarters of the buyers at OroArezzo, in search of new designs and trends in precious metal jewelry from the more than 600 exhibitors, are from Italy. However, other countries are well represented, including a fairly large contingent of buyers from the United States.
While U.S. buyers are in attendance, they are concerned about what they are able to turnaround to retailers. Wholesalers Bernard and Madeline Sakmar of Old World Chain, Beverly Hills, Calif., said that the increased price of gold along, the dollar’s decline when compared with the Euro, and less expensive products from places like India, China, and Turkey, have combined to make it difficult to convince retailers to take on Italian gold products.
“It’s had a definite impact on the business,” Bernard said. “Some pieces are just cost-prohibitive. We’ve reduced our margins to keep prices down a little bit. But then lowering our margins creates insecurity among our buyers.”
To adjust, the couple is looking for gold in lighter weights and pieces mixed with other materials and colors. “People are investing in color,” Bernard said. The couple, who have been in business for 30 years, is also providing some gold jewelry pieces to retailers on consignment.
The numbers confirm the hesitancy among American buyers. Total jewelry and gold produced by the Arezzo region in 2004 totaled $2.1 billion euros, an approximate 8.5% drop from 2003 figures, according to the Arezzo Chamber of Commerce, and a far greater drop than what the rest of the country as a whole experienced. (Arezzo accounts for 28.8% of Italian gold and silver product exports and 45% of the Italian domestic market.) Exports, which accounts for more than half of the region’s total jewelry production, fell by 6% to 1.3 billion euros, when compared to 2003 figures. In 2003, the drop was 25.5%, when compared to the previous year.
The U.S., with 264.7 million euros, is by far the largest buyer of Arezzo gold and silver products. It is also one of the countries where exports from Arezzo dropped the most, by 26.1% in 2004 and 33.1% in 2003. “In other words in two years it appears that U.S. imports of Arezzo jewelry has fallen by more than half,” Arezzo officials said.
Quantities of precious metals worked by the companies of Arezzo have fallen as well: from 165 tons to 155 tons for gold, and from 95 tons to 85 tons for silver.
In a province where gold and silver production accounts for 5.8% of the province’s GDP, 42.6% of exports, and employs 8% (10,500 employees) of the working population, local officials have taken notice. There are 1,621 firms in the gold and silver business in Arezzo, only a slight drop from the previous year, but that figure can be misleading, says Alessandro Ruzzi of Rosato, a local fine jewelry manufacturer. That’s because he says Italian laws make it very difficult for business owners to close their businesses.
One thing that is being done by area officials to help offset the decline, is a $26 million expansion and renovation of the Business and Convention Centre. In it’s 26 year history, the number of exhibitors gradually grew. That number peaked in 2003 with just over 600 exhibitors because the center reached capacity. When construction is completed in 2007, the convention center will just about double in size and house more modern facilities.