Entrepreneur Interview: Scott Thompson, CEO CARAT* London
Scott Thompson founded CARAT* London 15 years ago after identifying a gap in the market for costume jewellery that is accessibly priced but offers the standards of manufacturing of fine jewellery.
The business has gone on to open stores in London's Covent Garden, Burlington Arcade and, most recently, in Oxford. It is also stocked in hundreds of jewellers and department stores globally as well as online.
Thompson talks to The Industry about the highlights of the past 15 years and why he's not putting a time-limit on his ambitions for the future.
Congratulations on your 15th birthday! Can we take you back to the start of the business and ask you what inspired you to set it up and what opportunity you saw for Carat?
I was at a fancy dinner party many years ago, and I noticed a woman sitting at the table dressed impeccably. Her jewellery looked nice from far away but up close it was obvious that it was not made very well. After that moment, I noticed there were very few choices for women in jewellery that were both reasonably-priced and well-made, it was either cheap and poorly-made, OR expensive and very well-made. That’s when I started my idea for CARAT*.
Can you tell us a bit about your background before you set up the business, you’ve been described as “a risk taker” – would you say you are a natural entrepreneur?
I had previously been involved in a couple of start-ups during the dot-com era and my mother was quite successful with her own real estate business so you could say that in runs in the family. I saw the genesis of CARAT* from a business opportunity perspective first but at the same time the creative side of me has been an advantage in working in this fast-paced, ever-changing industry.
What was the first step in getting the business off the ground and what were the key milestones along the way?
The initial challenge was finding manufacturing partners who could work the way we wanted to. At the time we were doing costume jewellery and most people didn’t want to make it very well – just with low quality stones and brass. I thought we could do it with hand-cut stones set in silver or gold to make a more beautiful product. Additionally in the early days, finding landlords who would lease us a property for a business that didn’t have any other stores was the next hurdle. In terms of milestones, a memorable moment was when we opened our concession in Harrods, arguably one of the most iconic shopping destinations in London.
Tell us a bit about your brand’s approach to design? Your wife, Heidi, is creative director, where does she draw inspiration and is there a Carat signature design?
Heidi draws inspiration from her own lifestyle as a busy working female in the city who is also a mum. As she says, we are living in a time of FOMO where we are constantly pulled in all directions and have a lot of things to get done and places to go, but don’t want to compromise on style. We aim to design for a women who is looking for a lot of choices that she can make her own: jewellery she can wear to the office, at the weekend, to evenings out, and special occasions.
How big a role do fashion trends play in your designs?
We keep in touch with current trends and are inspired by the things that are going on in fashion and media from a brand point of view.
What about the price points: there are some very accessible price points in the collection, which is great, how important is that?
It is extremely important. From a design point of view, we stand out as we offer the fine jewellery aesthetic for an affordable price point. Jewellery does not need to be cheap or expensive, it should be accessible for all women.
Let’s talk about retail. You have a number of owned stores and are available in other major retailers, such as Selfridges, what is the strategy there?
We are a multichannel retailer. We do online, we do our own stores, and we do wholesale.
You have opened your first own regional store in Oxford. Why have you chosen that location and is this the first of more stores?
We have a thriving London retail business and have been planning to open in select British towns for some time now. The Westgate shopping mall in Oxford offers a different retail experience with its open air ambience and is the perfect location for our first regional UK store. We aim to open a few more doors in the near future.
The retail market is tough at the moment, but you seem to be doing well, why do you think that is?
Despite a rocky economic climate along with rapidly changing shopping habits of consumers, we have been able to stay on top of the curve. We have learned that it is important to be ready for change, evolution, speediness (i.e. new products, service, delivery). Creating a bond with the customer and always staying authentic is essential to our success.
How well does the brand perform online?
As e-commerce is taking prominence in how people choose to shop, we find that our website is reflecting this trend. Currently UK business is up 60% on the previous year and continuing to go.
A number of major etailers, such as Farfetch and Yoox Net-A-Porter, are entering the “hard luxury” space, suggesting there is no resistance to customers buying very high value items online, are you finding the same?
Yes, we have customers who spend high on a single receipt. Our most expensive items are in the few thousands of pounds but as internet shopping becomes more pervasive the sky is the limit to what people choose to purchase online. Look at Tesla cars, for instance.
What are the most important marketing channels for you? Your celebrity following is enviable, for instance, how did you achieve that?
We have a long-standing partnership with BAFTA, which gives us great access to amazing talent in the performing arts. Apart from that, the call-ins come in organically. Celebrities love it because it is very easy to wear on the red carpet. Most of the time when they wear fine jewellery that is outrageously expensive, they have to worry about security, insurance, and bodyguards. With CARAT*, they get the same look as those fine jewellery pieces without the strict rules and can enjoy themselves much more. Most importantly, they wouldn’t wear it if it didn’t look great!
When you reflect back on the past 15 years, did the business pan out how you expected it to and do you have any big ambitions for the next 15 years?
People underestimate two key factors to an entrepreneurial endeavour. Timing and luck. Keeping expectations real and achievable is much better than setting expectations that can undermine your own enthusiasm because you miss them. I’ve learned that having long-term goals are great but don’t set a time limit on when you will achieve them. It might be 5 years or 10 years. The right effort, timing, product, people you surround yourself with, and the knocks you’ll take on the way are all part of the journey of building a brand.