Introduction: Publicly listed Saudi Arabian company L’azurde is the world’s fourth-largest jewellery manufacturer and the Middle East’s biggest gold and jewellery designer, manufacturer and distributor. One of the few manufacturers operating in 21-karat and 18-karat gold and diamond jewellery, the brand’s prolific output sees it produce more than 3,000 different items every year.
The brand enjoys an avid following among Middle Eastern customers, and for its design partnerships with regional celebrities and influencers. Its latest collaboration features acclaimed Egyptian actress Yasmin Abdelaziz.
Until now, L’azurde’s manufacturing strength and local market success has not translated onto the travel retail stage to any widespread degree. But that’s all changing with the recent appointment of channel veteran Martine Larroque as Head of Global Travel Retail and a high-profile presence at TFWA shows in Singapore in May and Cannes next week.
In this exclusive interview, L’azurde CEO Sélim Chidiac tells The Moodie Davitt Report Founder and Chairman Martin Moodie about the company’s global aspirations in travel retail and beyond.
It’s been 13 years since Sélim Chidiac joined L’azurde, at the time a 33 year-old Saudi jewellery house which was undergoing profound strategic and structural change having been bought by private equity giant Investcorp a year earlier.
Chidiac was hired from Red Bull, where he was CEO of North America (and before that Head of Asia Pacific Middle East and Africa), subsequently providing the same kind of energy to his new role as Red Bull brings to its consumers.
“I joined Red Bull in 1998 when it was really just starting,” he recalls. “It was a mid-sized European firm with revenues of just €200 million at the time. When I left, we had reached €4.5 billion.”
Charged with sprinkling the same magic dust over L’azurde, Chidiac duly delivered. “We transformed the company by improving profitability. Having the typical 80/20 focus on products and customers, fixing corporate governance and establishing state of the art board and reporting systems,” he comments.
Guided by that laser focus, Chidiac and his team duly steered L’azurde towards a successful Initial Public Offering (IPO) in 2016 and – apart from the travails of a global pandemic – it has been making encouraging progress ever since.
“Today our revenues are roughly US$700 million. We have 2,000 employees and we are vertically integrated whereby we design, manufacture, wholesale and retail (including ecommerce) gold and diamond jewellery,” he explains.
While its strength lies is in its Middle Eastern heartland. L’azurde has gained rapid international traction and is now present in over 40 markets. What, I ask, are the company’s global ambitions in terms of domestic and travel retail channels?
“In the past couple of years, we have been exporting to some European and African markets and also to some states within the US,” Chidiac replies. “However, since we started developing our business in the channel three years ago, travel retailers such as Lagardère Travel Retail and Aer Rianta International told me, ‘Sélim, you have a great opportunity to take your products and brand globally, because you have a very attractive offering for travel retailers which goes beyond the Middle East.’”
Chidiac listened and then acted. He believes L’azurde’s high-quality gold and diamond jewellery offers an attractive value proposition in the channel, one that resonates with a common consumer desire for luxury married with affordability.
“We also have a very efficient [in-store] display, which we created here a couple of years ago. Retailers are seeing very high profitability from a very small space given to those yields,” he adds.
“In today’s world, consumers are really seeking both value and valuable jewellery. That’s why we focus on gold; we don’t do silver; we don’t do accessories. If you compare our products to Pandora and Swarovski, which are great brands, with us you get gold and diamond versus solid silver and platinum and crystals for a similar price.”
The time is right for a travel retail push
Why the relatively late entry to travel retail, a channel that has, after all, been premiumised so much in recent years? “Better late than never,” Chidiac responds with a laugh. “But you are right, Martin. Thankfully, we have been very busy with transforming the company internally. We wanted to make sure we were ready before entering travel retail globally and can offer something attractive for the operators.
“We don’t want to enter for the short term or have a poor experience with travel retailers. We believe today we are ready. And we’re willing to work with travel retail partners to do what it takes to make our journey a long term and successful one.”
Chidiac offers a dual message, one for retail partners and one for consumers. “We tell retailers we have very high-quality products and a lot of innovative designs – because we launch, on average, 400 designs every month at attractive prices and conditions both for them and for the end consumers. We believe this is a very attractive proposition for travel retailers.
“For consumers, we think women today want to have innovation and a wide variety of jewellery. Their lifestyles have changed a lot. Life today is much more informal than formal and that’s why we see women wearing a large variety and number of rings, earrings and necklaces. That is exactly what they get through L’azurde because we continuously have new offerings at the right prices and of very high quality.”
The company is leveraging all its experience into tailoring the most appropriate designs and SKUs for travel retail. “We will offer the 80-20 ratio of the highest-performing collections and designs. We’re also very agile in a way where we can rapidly adjust our assortment and our replenishment based on the consumer response,” Chidiac says.
I put it to the L’azurde CEO that the company’s manufacturing strength puts it in a superb position to respond to retailer and consumer demand for exclusive or tailored products.
“100 percent,” he replies. “Given the high number of products which we produce on a monthly basis, we can offer exclusive collections for retailers, depending on the requirements, likes and dislikes of the shoppers at their individual locations. So we can definitely play into that space.
“We want to partner with retailers to give them the most successful collections and collaborations. So there will be some fine tuning of the assortments as we go. And we have a long history and experience of successfully doing that.”
How have travel retailers responded to date? “We attended the [TFWA] Singapore show a few months ago and frankly we were very positively surprised by the response and the interest from many retailers in Asia,” Chidiac replies. “This was beyond our expectations and really raised our interest and our preparations for expansion.
Saudi Arabia’s surging developmentL’azurde CEO Sélim Chidiac paints a vivid picture of the energy and vibrancy permeating Saudi Arabia amid an extraordinary transformation of all aspects of the Kingdom’s economic, societal and cultural life. As the CEO of a company deeply rooted in the region, Chidiac says he is thrilled to contribute to Saudi Arabia’s rapidly evolving commercial landscape. “It’s really amazing what’s happening in Saudi Arabia,” he comments. “No-one would have bet previously you would have this kind of energy. Currently in Riyadh it’s August [mid-summer]. “We never saw a month of August so full of people – hotels and restaurants are full, and the city is vibrant, where a couple of years ago this would be a very quiet place at this period of the year. “I hear from more and more friends who want to come and visit who are very interested in the country. Businesses are doing very well but the best is still to come. There is so much happening in Saudi over the next five to ten years. So please come and join us here. There’s a lot to do.” |
Does China beckon? “Yes, we would love to go there. But we have to go step by step and make sure we have all the right preparations and product assortment set up to add value to the Chinese travel retail market.”
Travel retail, I suggest, is an almost definitive global channel. Wherever there’s a big city, there is likely to be an airport. Wherever there’s an airport, by definition, there is travel retail. As the world’s fourth-largest jewellery manufacturer, this is hardly a case of a newcomer bursting onto the scene. So how does the brand plan to go about boosting both retailer and travelling consumer awareness?
“Definitely through travel retail we will be active in some locations and regions for the first time ever,” Chidiac admits. “We will have to invest and partner with the travel retailers to raise awareness and an understanding of the brand. But we believe this can be overcome over time as we expand our distribution.”
To make those kinds of partnership work, I suggest, retailers really need to understand the ethos of the brand. So how would he sum it up? “L’azurde is here to offer great value and great experiences to jewellery lovers in every region around the world,” he responds.
“We want to empower women so that they can really show the best of themselves. We do that by offering a wide variety of high-quality products at affordable prices. That’s what we aim to do every single day. And so do the 2,000 people who are working with us.
“We think we have both a great opportunity and a great offering for travel retailers. We look forward to building this hand-in-hand with them over the coming years and to develop a very exciting new journey for this category within the travel retail sector.” ✈
A glittering Cannes showcase L’azurde is set to showcase its 18ct gold and diamond jewellery lines at the upcoming TFWA World Exhibition in Cannes (1-5 October) at Red Village (L37). L’azurde offers a wide range of elegant and contemporary jewellery collections. Its core range features gold and diamond jewellery, including contemporary line Miss L’. As noted in the interview with L’azurde CEO Sélim Chidiac above, L’azurde is known for its high-quality gold pieces which are particularly popular with Middle Eastern customers. L’azurde is seeking to expand in Asia and Europe, with travel retail a key channel in that growth drive. ✈
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