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Jewellery stores stocked with pieces priced north of £80,000 have multiplied in London over the past year.
In September 2023, the family-owned jewellery company Mouawad, hailing from Lebanon but headquartered in Geneva, opened its first European flagship in the Peninsula London. It was followed by an opening from London-based Asprey, which set up shop in the same hotel. Soon after, French diamond specialist Messika opened its first UK flagship in Covent Garden, while American jeweller Lugano selected Albemarle Street for its first European outpost. Tiffany Co unveiled its high jewellery boutique at Harrods last June.
This flurry of activity may seem paradoxical considering that, just one year ago, business owners, led by esteemed hotelier Sir Rocco Forte, protested on Savile Row against the end of the VAT refund scheme, which has driven luxury goods sales away from the UK. Data from real estate agent Knight Frank’s Intelligence Lab also reveals that British sales of watches and jewellery in July (the most recent results available) were down 10.3 per cent year-on-year — continuing a negative trend that dogged the industry in 2023.
“The VAT policy has not only shifted some luxury purchases and travel plans of American, Asian and Middle Eastern tourists to other European cities like Milan and Paris, but has also prompted some British residents to buy more luxury goods when travelling to continental Europe to take advantage of VAT refunds,” says Mario Ortelli, managing partner of consultancy Ortelli Co.
He also notes that the upcoming end of the tax regime, allowing UK residents with primary addresses abroad to avoid taxes on foreign income, known as ‘non-dom’, has led some ultra-high-net-worth individuals (UHNWIs) and high-net-worth individuals (HNWIs) to relocate to countries with more favourable tax policies such as Italy and the UAE.
Those operating in London argue that high jewellery is not about “seal-now deals”, but about building brand awareness and long-term relationships. The UK’s history, culture and royal family remain a strong pull for HNWIs from around the world. Meanwhile, to circumvent the VAT regime, jewellery houses with international stores ship goods abroad so clients can complete their purchases, while London-based brands offer discounts to offset VAT, absorbing the cost themselves.
“Having a presence in London is crucial for our brand,” says Pascal Mouawad, co-guardian of Mouawad. “The Peninsula hotel, with which we have a long-standing partnership, attracts precisely the type of clients we cater to, and the hotel’s prime location, along with the visibility of our logo, presents a fantastic opportunity for us,” he says. “Our expectations were high, given the city’s reputation as a global fashion and luxury hub, and I can confidently say that London has met, and even exceeded, those expectations.”
Window shopping for the wealthy
Becoming part of London’s dense sports and arts social calendar was part of Lugano’s business strategy from the start. “We have established a strong foundation in London through our partnerships, including those with the Serpentine Galleries and our continued support of the Royal Windsor Horse Show and the Longines Global Champions Tour,” says Lugano CEO Moti Ferder. “Looking ahead, we are proud to be the presenting sponsor for the Art of Wishes event in support of [non-profit] Make-A-Wish UK this autumn,” he adds.
“London is still a vibrant tourist destination with a solid financial hub, and it hosts important fairs such as PAD, the Treasure House Fair and Goldsmiths’s Fair,” says Valery Demure, founder of the eponymous agency that represents emerging jewellery designers. These, plus art fairs like Frieze London (PAD and Frieze take place simultaneously in October), are part of a cultural fabric woven with art galleries and private clubs, where champagne-soaked soirées foster relationships with wealthy clients.
Furthermore, during the summer months, London fills up with Middle Eastern residents seeking cooler temperatures, many of whom are accustomed to surveying the luxury goods market. They may spend less due to the new VAT scheme, but they still browse in the city where they have their trusted ‘grand vendeur’— how high jewellery salespeople are referred to within the industry.
The influx of Middle Eastern residents this season prompted Sotheby’s to organise ‘Hafla’ in August, a cross-category selling exhibition that featured bejewelled handbags co-designed by Asprey and Saudi Arabian Princess Nourah bint Mohammed Al Faisal. The exhibition also featured a curated selection of high jewellery in partnership with A2Z Advisory, which specialises in VIP clients. “For many of our Middle Eastern clients, London isn’t simply a place to visit, but a home away from home. We don’t see London’s position changing at all [within the luxury market], and in fact, with our exhibition this summer, we witnessed the city as lively as it’s ever been,” says Sophie Stevens, jewellery specialist at Sotheby’s Dubai, who coordinated the project.
Valérie Messika, founder and creative director of diamond-focused brand Messika, highlights the “very powerful personal shopping service” at department stores like Harrods and Selfridges as part of the allure. However, for its first flagship boutique, Messika opted for Covent Garden, describing it as “a fashionable destination with an attractive restaurant scene that draws a clientele more complementary to that of department stores or Bond Street”. Covent Garden has attracted other jewellery and watch brands such as Tiffany, Tag Heuer and Omega, positioning itself as an unmissable spot.
While London remains a hub for the wealthy, its role is gradually evolving from a primary shopping destination to more of a window-shopping hub, reflecting the shift of stores from transactional venues to three-dimensional advertising spaces. And when it comes to the window-dressing game, London is still winning.
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