In June, the 585 jewelry network announced the beginning of its new advertising campaign, the Golos Samary radio station reports.
“The operation of Yuvelirnaya Set 585 is based on a differentiated discounting system existing in the course of two years,” Alexander Tarasov heading the promotion group says. “It allows exact tracking and coordinating inventories by their turnover speed and prompt reaction toward price fluctuations on the Russian jewelry market. The advertising campaign concept may conventionally be divided into two components: a new price offer, which efficiently distinguishes us from our competitors (currently, we have up to 50% discounts for the entire product range), and an attractive commodity offer: diamond jewelry sold at a unique price of 2,999 roubles and above. Both components complement each other in a harmonious way and attract attention of the target audience.”
The advertising campaign will be kicked off simultaneously in 130 Russian cities hosting 470 stores of Yuvelirnaya Set 585. In the run-up to this action the company will renew its advertising vehicles made in a uniform graphic key and placed outside and inside its stores. Central radio stations will broadcast an audio commercial to support the company’s new advertising campaign.
According to the Yvelirnaya Rossiya weekly, the advertising action is sloganned as “The Sky with Diamonds.”

In 2007, the 585’s turnover reached about $200 million or 5% of the Russian jewelry retail, the Sekret Fimy weekly reports. The network has 470 stores in 130 Russian cities. Under the company’s development schedule, by the end of 2009 their number is to be doubled and reach one thousand outlets. Another 350 stores were to be launched in the Ukraine and Kazakhstan. However, from the 1st of June the company shareholders (their names are not disclosed; according to the SPARK System, Alexander Smirnov is the founder of OOO Yuvelirnaya Set 585) had to refuse from such wonton growth. The fault was with the company’s working capital insufficient to open new outlets and problems in the currently operating stores.
The discounter concept is the main competition weapon of 585. Almost all jewelry retailers working today in the mass-market format are trying to attract by low prices in one way or another. The 585 company has set the task to announce its discounts louder than others. For instance, Yashma-Zoloto is using one and the same advertising gimmick for some years already offering discounts for the “diamond group” products. Whereas the 585 network changes its actions on a monthly basis kicking them off simultaneously all over the country.
“They pursue a competent kind of marketing, which looks prominent and strong-knit,” admits Artem Podstreshny, CEO of the Russkaya Yuvelirnaya Set Agency. “However, its content is dubious. Being tuned out, they are sawing off the bough on which they are sitting. Jewelry stops being perceived as an element of prestige. In the long run, the buyer used to look to low prices may switch over to jewelry substitutes like bijouterie, all the more so it is in fashion.” On the contrary, in the 585 company they believe that modern buyers like garish sales irrespective of whether it is jewelry or, for example, clothing.
Still, the average cheque at 585’s stores amounts to 2,500 roubles, whereas with Adamas it is 10,000-12,000 roubles. And it looks like the discounter is beginning to experience some difficulties, the Sekret Firmy says: the 585 network has already run into product shortage. Today the network is selling only 75% of its basic assortment displaying a sparse layout in its showcases.
Georghi Pobelyanski, CEO of Yuvelirnaya Set 585, said the problems emerged in February 2008 after the Federal Customs Service suspended tolling licenses held be Russian jewelry factories. “As if tolling was not enough, the Central Bank bought in all the gold stocks in February 2008 and there was no one around to buy gold from and pass it over to the factories,” Georghi Pobelyanski complains. “Meanwhile, Russian-made finished products are running short of our needs.”
However, the problems experienced by the biggest jewelry retailer may not be thus exhausted. In the opinion of Pavel Sidorenko, Marketing Director of Adamas, the Petersburg network fell over its wonton growth and now simply lacks current capital.
Indeed, it is more and more expensive to fill one’s stores with gold assortment. The 585 network could have sold its old goods offering a too good discount, but later was not able to buy an equal amount of new goods due to an extremely rapid rise of prices.

The 585 company spends an average of $500,000 to open each outlet (including the stock of jewelry). According to Artem Podstreshny’s estimate, to shape up the latter one may need $150,000-200,000. In other words, to increase the product range by 25% (from the current position to 100%) the company will need $40,000-50,000 for each store. Totally, for all the 470 outlets the amount will be as much as $18.8-23.5 million. It has no sense to open new stores when the existing ones have to operate a sparse layout. “We have suspended the development program,” Alexander Tarasov admits. “But who told you we shall not go on with it after we dig in our heels on the turf? The new strategy is designed for mere six months and so far no one has cancelled the task to launch one thousand stores by 2010.”
In particular, the company decided to change its marketing concept. If earlier it was keyed exclusively to advertising price offers, now it will also help to shape up the image of the brand itself. In the future, Xenia Sobchak may become the network’s face – the negotiations with this TV anchorwoman are currently under way. “The TV viewers of the “Home-2” reality show are our target audience since the project has gained enormous popularity,” Tarasov speculates.
The competitors are sure these moves only are not enough. During the eight years of its existence the 585 company closed just about 25 stores, mainly located in basements, which had appeared in the beginning of the network activity and specialized in pawn broking. Probably, now the ambitious retailer will have to clean its yard with greater fervor.