Leading positions in production output among domestic companies belong to those, which appeared in the market in the early 1990s, the “Pryamye inVESTItsii” monthly reports. Adamas, Yuvelirny Dom Yashma and the Moscow Jewelry Plant are at the top of the list. They have made a stake in fast development of retail sales and are selling mainly their own products. Corporate stores of this trio are located literally head to head, at least in Moscow.

The Adamas Factory was founded by brothers Andrey and Pavel Sidorenko 15 years ago. The first is the company’s general manger, while the second is its marketing director.
Adamas started to build its own retail system in 1999 trying to fight down the onslaught of jewelry smuggled from the South-East Asia. However, it took eight years more for the company to start its retail expansion in good earnest. If in 2006 the Adamas brand accounted for 56 stores, last year their number was already 216. The numerical increase in stores was accompanied by aggressive outdoor advertising along with introduction of computer software to automate business processes.
The company’s stores are stocked for 75% with Adamas’ own products, while the rest are purchased from outside manufacturers. The company is targeted at mid-income clientele. Some part of the company’s collections is elaborated by foreign designers, and Adams is a regular participant of international exhibitions. However, along with mass production the company is engaged in more expensive and short-run production and exclusive jewelry made to individual orders.
According to experts, Adamas gained about $385 million worth of receipts from sales last year. Totally, the company sold over 30 million pieces of jewelry during its 15 years of operation.

An average purchase made in the Yashma-Zoloto Network (mainly trading in jewelry produced by the Yuvelirny Dom Yashma Holding) is worth 3000 or 4000 roubles to a client. The company says they are trying to make their products as affordable as possible to grass-root consumers.
The company’s ownership is attributed to businessman Igor Malyavin. His wife Stella Malyavina happens to be the president of Stella Exclusive, a jewelry company. She is itemized as a founder of OAO YASHMA, a trade and production company, which gave rise to the namesake jewelry house.
However, this trading and producing company emerged in 1998 and it was making jewelry of a very wide range (rings, earrings, bracelets, pendants, necklaces, brooches, exclusive handmade items) in .585 gold. From the very start, its owners furnished their factory with modern equipment and added a workshop producing women’s and men’s watches to the one engaged in jewelry output. Later on, the company ventured small-scale and well-knit enterprises, each of them capable to operate in its own market niche.
This jewelry house comprises ten company stocks. There are also more than 200 corporate stores in its composition. In 2006, there were 165 of them, and last year they numbered 212.
In 2001, the Yashma Trade House and several dozens of Yashma sales outlets were brought together under the brand of Yashma-Zoloto. Some time later, its owners declared that they would open one boutique near each Moscow metro station in the course of 18 months. Yashma has not fulfilled these plans, but they are describing their new horizons as 100 new stores to be launched under the brand of Yashma-Zoloto.
According to expert estimates, the company’s annual cash receipts amounts to $300 million.

The Moscow Jewelry Plant (MJP, for short) established in the early 1920s by the State, was bought out in 1993 by the group of Lev Leviev, an Israeli businessman and owner of LL International Holding B.V., the world’s largest private diamond-mining and diamond-cutting company.
The plant is specialized in making diamond jewelry. In 2006, Leviev transferred some part of its production lines to the City of Perm to Kama-Kristall, a company he owned there. The plant’s affiliate is turning out 25 kg of gold and platinum jewelry with diamonds every month.
Last September, MJP purchased (the deal was estimated at about $10 million by marketers) the Lukas-Zoloto Factory renting room on the territory of the Polyet Company in Moscow. Lukas manufactures jewelry for Valentin Yudashkin’s Fashion House and is also the proprietor of exclusive rights for Playboy and Pamela Anderson jewelry in Russia.
The company has 128 stores. Incidentally, to expand its retail the owner invited a new team of managers in the end of 2005. They set up a centralized office handling the operation of the network and its development. They also tuned up advertising actions run at restaurants and stores and established a system of discounts.
The factory is planning to bring the number of its stores to 250 by the end of 2009, which is not surprising: According to the estimates provided by Magram Market Research, the domestic luxury market reached $7.5 billion in 2007 (for comparison, in 2005 it was $2.5 billion). The experts include the value of jewelry into this amount first and foremost.
The production capacity of MJP (including its affiliate in Perm) is rated at 28,000 jewelry pieces a month. The company gains about $250 million worth of cash receipts annually.

There is another leader of the Russian jewelry market – Almaz-Holding headed by Flun Gumerov. This company is not merely staking on developing its own sales network, but on assertive PR campaigns aimed at improving the image and recognizability of its products, as well as on technical retooling its production facilities.
The company is headed by Flun Gumerov, a 53-year-old native of the Kostroma Region, who graduated from the Kazakhstan Institute of Strategic Research. He started his career in 1993 having launched a small company engaged in wholesale jewelry trade, and later, as was often the case in the contemporary history of Russia, he bought a veteran jewelry factory – the Krasnoselsky Yuvelirprom Plant. By the way, this was the only jewelry plant visited by Vladimir Putin during his presidency.
Besides Yuvelirprom, the holding includes the Kostroma Jewelry Factory and the Topaz Factory. Despite the company’s highly specialized name, its staff is dealing with all kinds of precious metals – platinum, all-assay-range gold, and silver. “Operating in all price segments of the market, the company is making both mid-income customer affordable products, as well as very expensive things,” the holding’s president says.
Apart from wholesale and retail divisions (the company has 100 signature stores, which account for 50% of sales of company-made products), the holding operates a pawnshop network, the largest in Russia, and a private security guard agency.
On this background, Gumerov is planning to withstand competition not solely by way of developing the retail division and an assertive PR campaign (Almaz-Holding, like the Moscow Jewelry Plant, is active in advertising its products, engaging, among other things, Russian artist stars), but also by way of retooling his company’s production lines (which may serve to increase labour efficiency), including the use of credit resources for this purpose.
The holding’s approximate cash receipts amount to $200 million.

Russkiye Samotsvety of Saint Petersburg was established in 1912. Eighty years later the company went public. Currently it is headed by Sergey Dokuchayev, Cairman of the Board at Lanta-Bank. The bank owns 6.29% of the company’s stock, while 70% belong to Veles Capital, an investment company, which appears to be a nominal holder.
Apart from jewelry, Russkiye Samotsvety is making enamel-filigree silver dishes and silver ware, as well as picturesque enamel miniatures, watches and watch bracelets. Overall, the product range of this enterprise accounts for more than 3,500 models and according to Sergey Dokuchayev, is tuned to suit grass-root buyers. Russkiye Samotsvety is selling its goods virtually across all the Russian territory covering 180 cities. The enterprise is dealing with more than 500 trade companies, so far leaving its own network compact with its 11 stores, although this network has already been twice the winner of “The Best Jewelry Network of Saint Petersburg” Contest.
However, Russkiye Samotsvety, according to the company’s general manager, is planning to open no less than five stores in Moscow too, each having an area from 80 to 150 square meters. The company hopes to take its stand in a niche of the upper mid-price category (the average price of a jewelry piece at Russkiye Samotsvety boutiques is 10,000-15,000 roubles).  Market participants and experts view these plans of Russkiye Samotsvety as quite realistic. “Domestic factories should be diligent in gaining their retail footing to maintain sales,” Denis Gorinov, Lead Marketing Adviser with FinExpertiza Consulting, believes.
Very soon, Russkiye Samotsvety will invest into a new building, which will shelter all the company’s production facilities located in Saint Petersburg. Aside from that, the company will attract $50 million to be allocated for the construction of a business centre, a trade and leisure mall and a hotel near the Ladozhskaya metro station (the project will total $350 million).
The annual output of the company is $30-35 million a year, and 15% of it goes for export.
Despite all the difficulties, no one of the above companies is complaining about lower profits and sales. Market experts predict a stable annual sales growth of 20% primarily due to intensive expansion into provinces.

The share of Russian companies in the market of most expensive jewelry is so far negligible. This subject is discussed by the “Kommersant-Dengi” weekly. In Basel, for instance, there occurred only three Russian jewelry companies among 2,000 participants – one-tenth of a percent. The current place of Russian trademarks in the domestic luxury market is estimated by experts as having the same proportion. These, however, reckon to struggle for a greater part of the market. Some shifts forward are made by the players of the low-price segment. The price-related competition in the low-price segment turned out to be so harsh that some of the mass-market players were contemplating a move to a higher price segment. The growing wellbeing of population fostered the players in this intention. Very democratic Yashma has launched a premium network of Stella Exclusive selling the Art Diamond Collection at $5,000-10,000 a piece. Adamas is preparing its own collection in the same price segment to be launched by the coming summer. Mid-price segment players, too, started to look into the higher segment. Thus MJP, which has been actively pursuing the policy of “diamond popularization,” has issued a luxury collection and bought the Lukas Company.
The companies initially targeted at the high-price segment are also full of optimistic expectations. Three of them were represented at the last Basel Show: Almaz-Holding and ASB (Rifest Brand) of Yekaterinburg and YuTe-Yuvelirny Teatr of Moscow. The latter, having placed its exposition in the most prestigious second Hall of Visions and launching a pageant show of its new collection “Revelation” authored by company owner and jeweler Maxim Voznessensky, managed to attract more public and press attention.
All the three companies assure that their sales are going up in a convincing way.
The same is repeated by other players, who stayed at home. “Our sales were up 50% as far back as last year,” says Alexey Davydov, Brand Director of Kristall, a jewelry centre. “Next year we hope to win over 15-20% of the premium segment in the Russian market.”
To implement these plans, the company is building its own network – it has already opened nine boutiques and plans to launch 14 more.

Nevertheless, experts believe that no one of the Russian market participants will be able to seize the premium segment shares declared by Kristall.  The problem is not even with the quality of their jewelry. The real problem of Russian companies lies with absence of super brands, without which the majority of marketers will at best preserve their current market shares, but in no case will build them up.
“Big style brands” occupy mere 10-20% in the world market of expensive jewelry. At the same time, their share in the (relatively) tiny Russian luxury market is significantly larger. “If in choosing their clothing Russian VIP buyers have turned more democratic - they are content with purchasing various brands of apparel made by young designers, etc., - they do not afford such liberty in choosing their watches and adornments,” says Marina Vlasova, Director of MarketUp, a consulting group. “This is probably due to their eagerness to preserve their inhering to the elect. Because turning many fashion brands democratic resulted in increasing their mass consumption.  Any manger may afford a Hermes tie or belt. However, luxury watches and jewelry remain inaccessible to the middle class.” Russian manufacturers are loosing to their Western counterparts in brand recognizability. Therefore, if a well-heeled lady is aroused to gladden herself with another diamond, she will most probably turn her eye to a Russian made jewelry piece only if her jewelry collection is already made up of Tiffany or Chaumet things. Only in this case she may efficiently show off the new trinket to her girl friends demonstrating the exquisiteness of her choice.
The majority of Russian jewelers have a rather vague idea about brands, says the “Dengi.” Valery Radashevich of the Guild of Russian Jewelers is fond of mentioning the Krastsvetmet Jewelry Plant as an example, saying that market experts were trying to persuade its top management to change the brand name for a long time, but the answer was always proudly negative because “the brand of the Krasnoyarsk plant of precious metals named after Gulidov was known to anyone and needed no change.”   Actually, there are quite a number of “hardened” manufacturers content with their pipe dreams of fur-clad ladies indignantly rejecting Tiffany necklaces and demanding something produced “by the plant named after so-and-so.” 

Young companies understand the meaning of the word “brand” well, but they are those, which lack history. “History and connection with the past is one of the key components of any top class brand along with such features as excellent quality, high price and rarity (as distinct from the mass scale production),” Marina Vlasova says. “It is the history aspect, which is lacking in Russian jewelry brands, to make them win the status of luxury brands in the eyes of sophisticated buyers. If such world-renowned trademarks as, for instance, Cartier have a history of more than half a century, our brands are just at their baby age.”
Due to lack of their own history, young and aggressive companies are trying to portray it or – which is more often – to inscribe their names into the general canvas of the Russian jewelry tradition, unmercifully exploiting the only name full of meaning to the outer world – Faberge.
Andrey Ananov eagerly agrees with his title of “Russian Faberge”, however doing quite a good job to win it – he started in 1989 making Faberge-styled Easter eggs and in 1991 signed a contract with Elida-Gibbs to establish the “Faberge par Ananov” Trademark. Today the Ananov Brand is one of the most recognizable in the Russian market and in some places in the West.
No less serious job is being done by the YuTe - Yuvelirny Teatr Company established in 1998 by Russian artist-jewelers Irina Dorofeyeva and Maxim Voznessensky. Aside from taking part in exhibitions, YuTe is merited for close integration into the domestic social life.   The company gives its “mystery plays” for the most exquisite public amid the best-choice interiors.  Many Russian artist stars wear YuTe jewelry.
There are also not so prominent examples of newborn luxury brands in this country. For instance, the Ringo Trademark is developing at a fast pace introducing exclusive art-form jewelry so far in the above-mid-level price category, although certainly having a chance to make it to the luxury market.

However, the greatest chances to get a noticeable share in the market are of course not with luxury manufacturers, but with the daughter company of the Kristall Jewelry Center, the largest polished diamond manufacturer in Europe, the “Dengi” believes. The company was established in 2002 and it put its emphasis on reviving the Russian classic traditions as its guideline, which was believed to be their primary mission, according to the company management.  Thus, Kristall in co-authorship with the Hermitage instaurators is working on the “Hermitage” Collection featuring architectural motifs of Saint Petersburg, and it is making the “Ballet” Collection being a sponsor of the “Russian Diamond Seasons.” To make the brand popular, the company has allocated multi-million advertising budgets: it is sponsoring the concerts of Joe Cocker and Carlos Santana in Moscow and Saint Petersburg, while its jewelry has been presented to Elton John and Cher. Nevertheless, Alexey Davydov agrees that their sales are aimed first of all at Russian-speaking public: most probably, there will not be too many worshipers of “Russian style” among foreigners. According to the publication, there are not so many of them among well-to-do Russians as well. “Consumers are ready for appearance and consumption of Russian luxury jewelry brands exactly as much as the brands are ready to make their own assertive presentations,” Marina Vlasova of MarketUp says. The market research results point out that as before the quality and the price of a jewelry piece remain to be one of the key factors for choice. In this sense, Russian jewelry brands (diamond brands in particular) have quite a good outlook.  If they will be concerned with assertive and, which is the main thing, clever promotion among the target audience, this will certainly attract more interest on the part of high-income consumers.

In brief, the techniques of making up a Russian jewelry brand, in the opinion of another publication, which is the “Sekret Firmy,” should be as follows:
- find historic roots and create a striking legend;
- see to it that a high price agrees well with a no less high level of implementation;
- be sure to provide for stable quality;
- limit mass distribution of products;
- be sure to choose a person to be the face of your brand, who enjoys authority with the target audience.
Helen Yarmak is one of the Russian luxury brands, whose experience has been colligated by the publication.

Helen Yarmak was creating her luxury brand by intuition, without knowing the brand-making rules. Now her furs are worn by Hollywood celebrities (Sandra Bullock, Sarah Jessica Parker and Kate Hudson are among Helen Yarmak’s Fashion House friends), her trademark representation offices are located at Ritz-Carlton in Moscow and in Fifth Avenue in New York neighbouring the Chanel and Louis Vuitton boutiques, her collections are bought by Saks and Neirnan Marcus. While some time ago, Yarmak was concealing the origin of her trademark.
In the middle of 1990s, Helen’s first collection was rejected by Moscow stores. No one believed in a Russian name. “The owner of one store bluntly turned my offer down without even giving a glance at my collection -  as if to say that there will be no Russian names ever featured at his store,” Yarmak recalls. The designer changed the label name spelling for Helen and started pretending to be a representative of this mythic foreign company. Soon her fur collection was purchased by a boutique of Sadko-Arcada, whose Swiss management knew about the Russian origin of the brand, but did not refuse to deal with it.
The new trademark could not afford a PR campaign. On the other hand, Helen was boldly inviting the Moscow elite to visit her shows of mink manteaus, sable fur coats, cashmere overcoats and fur accessories. Soon, Yarmak had artist stars among her clients, who were promoting her brand just by putting on the things they had bought or been given as gifts.  “It is always convincing when clothes are worn by celebrities,” the designer says.
Limiting the number of hit models has turned out convincing as well:  they are made every year in single copies and worth over $100,000. People subscribe for Yarmak’s famous fur coats in advance, much in the same way as for the famous Birkin bag made by Hermes.
Very soon, Yarmak realized that operating in the luxury segment meant an individual approach to clients. This is why one has to select special personnel corresponding to the educational and intellectual level of buyers. Yarmak does not employ to her showrooms those who were already known to be in trade business. Model-type girls are also in no favour here. “We have special brain requirements,” Helen says, stressing her advantage over boutiques selecting their employees by their outer appearance.
Intellectually bright young ladies will probably be more able to explain the advantages of Yarmak’s products, says the “Sekret Firmy.” The brand’s owner has been speaking the investment language for quite a long time already. Her new jewelry collection includes “large sapphires and aquamarines of ‘investment’ size.”  The sable coat is also an investment (“sable is getting more and more expensive at auctions from year to year”). For new buyers of luxury, the sense of their proper exclusiveness and deep conversance is complemented with the realistic “I am investing capital.” Well, this aspiration may be employed to make very good money, the publication says.