As South Africa’s only jewellery retail franchise, NWJ has cornered a very lucrative market. The company, established in the early 80s as Natal Wholesale Jewellers by Hylton Rabinowitz, has its roots in an unremarkable store in Durban’s CBD. Today, it’s a national customer-driven business that offers a wide range of quality jewellery and watches at reasonable prices.
Although the company does not compete on price alone, NWJ has its own factory which allows it to cut out all the middlemen who add on their own mark-ups and pass these savings on to customers. That’s how NWJ makes quality jewellery affordable to far more people than most jewellery stores do.
In-house Manufacturing
Added to that, jewellery manufactured in its factory carries the NWJ-SABS guarantee of gold content so customers always know exactly what they are buying. It’s the only jewellery retailer in South Africa that does this. That’s one of the major differentiators of this business – Rabinowitz had the prescience to buy shares in one of the oldest jewellery manufacturers in Durban which supplied NWJ with the majority of its locally manufactured jewellery. By doing this, it was possible to sell top quality jewellery to the public at wholesale prices. “Having our own manufacturing division means that our prices are very competitive in the market and we are able to offer our customers a discount of 35% off their jewellery purchases,” says Clifford Stockley, who was appointed GM of NWJ in 2009. “Controlling channels of supply and distribution makes it possible for NWJ to be first to market with competitive prices and with equal or better quality when compared with imported products.”
Trend Spotting
The company also ensures that its customers can keep up with international trends in watches and jewellery by sending its buyers and designers to overseas fairs regularly so that they can see what’s fashionable and what is new and exciting. Although most of the jewellery in its stores is manufactured locally, some of it is also brought into the country from Italy, Germany, England, the East
and India.
In this type of business, that is a key competitive advantage, especially as South African consumers can be quite demanding and are very aware of international style and design.
Stockley says the company places a lot of emphasis on innovation.
“There are new jewellery trends in various types of metals and we have introduced these ranges – such as Tsar stainless steel and titanium jewellery – to the South African market with great success.
Variety is especially important in this sector and NWJ offers a wide range of jewellery that includes everything from affordable fashion items to more exclusive pieces crafted in gold and precious stones. This makes our products an appealing option to many different types of customers, whether they are drawn to classic or more modern items.”
Thanks to the manufacturing facilities, the company also produces custom-made jewellery, which is crafted by an experienced team of designers, gemmologists, goldsmiths and jewellers, and offers repair services.
Customer Focus
“Part of the success of the brand is the fact that we consistently meet and exceed customers’ expectations, as evidenced by our Daily News Readers’ Choice awards which we have won for the past six years. That’s about customer service and it’s something that lies at the heart of the NWJ brand. Franchisees who buy into the brand will profit from it. It’s as simple as that.” Branding is a particularly strong point where NWJ is concerned and it’s been noted by the franchising industry. “We have enjoyed steady growth through the years as our offering to both our franchisee and our customers is unique.
“Our brand is very visible in the market place as we run numerous promotions throughout the year to ensure top of mind awareness.
We have ensured the sustainability of the brand by focusing on quality, value and choice, three elements that are fundamental to the business and which are adhered to by everyone at all levels. It helps to have an established management team with many years of experience in the jewellery field. Our company structure is very open with easy communication across the board.”
The NWJ Franchisee
This is a franchise system that will appeal to people who want to work regular hours in a sophisticated and attractive environment, serving customers who are men and women predominantly in the LSM 7 to 10 categories. What’s also attractive is that NWJ has an established customer base going well into the millions.
“Our ideal franchisee is a ‘people’s person’ who is able to handle customers and staff, and is willing to be actively involved in the business,” says Stockley. “You need to have an outgoing personality. A bit of artistic flair would also be to your benefit. Business acumen and a degree of management skills are required, as well as an understanding of the control of stock.”
Stockley points out, however, that NWJ provides full training to franchisees at its head office and in an in-store environment, so few specific business skills are required as franchisees know exactly what is expected of them. By the time they are ready to open a store they are familiar with all aspects of operating the business, from stock control, to finance, IT and product knowledge.
“All aspects are covered to ensure that each franchisee has the tools to make their store
a success,” Stockley says. “Beyond that, they have the full support of the head office team and a highly experienced field service consultant who visits the store regularly to monitor and advise.
“Our most successful franchisees have a very hands-on approach and are fully involved in all aspects of running their stores. They have a passion for the brand and that is critical to making a franchise store work. You have to wholeheartedly buy into the brand, live and breathe the brand and make it your own.”
As with all remarkable franchise systems, NWJ holds the brand paramount, which means that franchisees are required to be the custodians of that brand from the moment they join the group.
The initial investment for a franchise store is R1,5 million, which includes
R800 000 stock. Stores range in size from as little as 36 m2 to 200 m2. Franchisees pay a management fee of 5% and a marketing fee that is 4% of turnover. The company’s trading density ranges from R45 000 to R100 000 per square metre per year.
Here’s what franchisees can expect to receive from NWJ:
- A comprehensive business plan
- A carefully selected site
- nStaff selection and training
- POS system, back office
and training - Marketing and advertising
promotions - Financial applications and
lease negotiations - Fixtures and fittings
- Cash flows
- Professional market research
- Product training
Once a franchisee application form has been received by NWJ’s head office, a meeting is set up where a full presentation is given to the prospective franchisee. If approved, the franchisee will be asked to commit a refundable deposit. NWJ will also provide all documentation required for the prospective franchisee to make an educated business decision. Application forms from the various finance houses are supplied by NWJ. Once the franchise agreement and forms are signed and submitted to the banks and approval is granted the set-up process begins.
As a FASA member, NWJ provides a full disclosure document that includes all the information the franchisee should get regarding the NWJ company and franchise, such as history, personnel, confirmation and breakdown of costs, and a list of fixtures, fittings and stock that they will
receive as part of the franchise package.
“Over the next five years we will be investigating master franchise opportunities outside our borders, and it will be exciting to see how the brand fares in other countries.
- NWJ At A Glance
- The first NWJ store opened in Durban in 1983.
- Today there are 67 franchise stores and 20 corporate stores.
- NWJ has won the Daily News Readers’ Choice Award every year since 2004.
- Average customer spend is R800, although NWJ also carries jewellery that appeals to much more expensive tastes.
- In 2010 NWJ was a finalist in the Franchise Association of Southern Africa (FASA) Franchisee of the Year and Brand Builder of the Year categories.
- NWJ Quality Jewellery is a member of both FASA and the Jewellery Council of South Africa (JASA). It is also accredited by all the recognised major financial institutions.
- Information on becoming an NWJ franchisee is available from Sean Coleman,
- +27 (0)31 570 5000, seanc@nwjcorp.com
- To learn more about NWJ go to www.nwj.co.za
