Retail Scope

RAPAPORT... The last stop for diamonds is the retail store. Here is a behind-the-scenes look at what is happening at retail in the U.S.

LUXURY SPENDING DECLINES BUT CONFIDENCE RISES

Although luxury consumers in the United States — classified as those with average incomes of $149,100 — cut back their spending in the third quarter of 2006, they did feel better about the state of the economy, according to Unity Marketing’s luxury consumption index.

“The rebound of the index to 103.3 points [from 99.2] means that luxury consumers have more confidence about the economy and their financial status,” said Pam Danziger, Unity’s president. However, that didn’t result in increased spending on luxury items. Consumers’ average quarter-to-quarter luxury goods expenditure declined 10 percent in the third quarter to about $13,430. Further, Unity pointed out that super affluent consumers — classified as those with incomes of more than $150,000 — reduced their expenditure levels even more so than the average luxury consumer.

In all categories of luxury goods, including jewelry, sales fell during the quarter, with the exception of electronics, furniture, clothing, fashion accessories and wine and spirits. “While the lower- and middle-class consumers have benefited from the drop in gas prices, this doesn’t have a significant effect in the luxury market,” noted Thomas Bodenberg, Unity’s economic forecaster. “On the other hand, luxury consumers are much more impacted by the decline in the housing market.

“The super affluent, in particular, who tend to live in the most expensive houses are likely to have experienced the steepest drop in their home’s value,” he added. “This translated into more moderate levels of spending on luxury in the third quarter.”

Danziger expects that “given the greater levels of confidence” and with the Christmas season a major influence, luxury consumers will have a stronger fourth quarter of spending versus the third quarter.

DEBOULLE LAUNCHES NEW BRANDING CAMPAIGN

Heralding its 25th anniversary next year, deBoulle Diamond & Jewelry, Inc. has launched what it calls the first fully integrated campaign for the company. The campaign, which includes print, online, direct mail and outdoor media components, incorporates a series of jewelry pieces and watches that showcase the product lines designed and carried by deBoulle. Each ad of the campaign, created by Dallas-based advertising agency Revel, draws on the “de” part of deBoulle to capture the message of witty taglines.

The first set of ads features a citrine bracelet and an emerald, sapphire, ruby and diamond necklace. The company indicated that the campaign will be concentrated in the Dallas/Fort Worth marketplace. Print ads have already begun, online and direct mail marketing kicks off during the holiday selling season, and the first outdoor ads will appear in 2007.

Meanwhile, deBoulle recently hosted an innovative evening in the Dallas social scene. The jeweler opened its doors to guests and their pooches for a cocktail party dubbed “deBoulle Goes to the Dogs.” Along with food, refreshments and entertainment, and doggie treats and paw readings for the four-legged guests, a silent auction was held to help raise funds for Operation Kindness, a nonprofit animal welfare organization that cares for homeless and unwanted dogs and cats. It doesn’t euthanize any animal to make way for another, instead caring for all animals taken in until they are adopted. Operation Kindness cares for up to 200 animals or more a day, with more than 2,400 dogs and cats successfully adopted every year, according to deBoulle.

KRISTALL UNVEILS ONLINE STORE

Smolensk Kristall, the state-owned Russian diamond manufacturer and Diamond Trading Company (DTC) sightholder, has launched an online store called www.kristallsmolensk.ru, which is said to be the first Russian site to sell gems via the internet. According to Smolensk Kristall, the site is the first online store where wholesalers, retailers and individual buyers can purchase the products of the manufacturer. At this stage, only Russians can make purchases due to customs and other impediments precluding the sale of diamonds to foreigners.

In a press release, Kristall indicated that the main feature of the new site is its “orientation to individual needs.” After a wholesale customer has filled in an order form, Kristall’s experts will then carefully select the diamonds required, while a special option for retail buyers is that any of the wide array of diamonds offered can be reserved until a transaction is concluded. The website also contains a list of prices, something that used to be commercially sensitive. The company’s sales totaled $347 million in 2005.

ALLENTOWN JEWELERS JOIN FORCES

Allentown, Pennsylvania-based jewelers Bixler’s and Avalon, Maurer & Bash have merged. As a result of their union, Bixler’s will close its Village West Shopping Center location and the name of the Avalon, Maurer & Bash store at 1457 MacArthur Road, outside the Lehigh Valley Mall, will change to Bixler’s. The Bixler’s store at Centre Square in Easton will continue to operate as Bixler’s.

Joyce Mitman Welken, a sixth-generation member of the Bixler family, will be the chief executive officer of the new company, which will remain a family-run enterprise. “We believe that the change will take Bixler’s to a whole new level, expanding our merchandise selection to include the designer collections and the exquisite diamonds that Avalon, Maurer & Bash is known for,” said Mitman Welken, the great-great-granddaughter of Bixler’s founder Christian Bixler. “Bixler’s has an incredible legacy within the Lehigh Valley,” added Mark Maurer, owner of Avalon, Maurer & Bash. “The family’s commitment to their customers and quality of goods is one we emulate.”
 
A&A JEWELLERS SHUTS DOWN PLANT

A&A Jewellers Limited, the Toronto, Ontario-based manufacturer of gold and diamond jewelry, has blamed its inability to compete with the cheaper labor markets of India and the Far East for the recent closure of its eastern Toronto plant. In a recent statement, the company described itself as having been the primary supplier of jewelry across Canada for more than 40 years, supplying major retailers such as Birks, Sears and Wal-Mart, together with many other shops, big and small.

Liquidation of the 100,000-square-foot plant has left hundreds of long-term staff unemployed, A&A added. The Jewellery Liquidation Centre, affiliated with Jewels By Koby, is inviting the public to the A&A factory premises to view the entire remaining inventory, which will be sold off at significantly discounted prices.

HONORA OPENS MANHATTAN STORE

In celebration of its 60th anniversary, pearl jewelry design firm Honora opened its first store in New York City at 30 East 57th Street, just off Madison Avenue. The 1,000-square-foot boutique, designed by architect Manny Encarnacion, showcases pearl jewelry designs featuring fashion-forward freshwater pearl pieces and elegant strands of upscale South Sea or Tahitian pearls on their own, or combined with diamonds or colored gemstones. The jewelry ranges in price from $50 to $50,000.

The Honara boutique also houses a “create-your-own” or custom bar where customers can select a strand of pearls, develop their own design and then have an on-premises pearl stringer make the original, one-of-a-kind piece to their specifications. “Customers can create necklaces and bracelets to suit their individuality and personal style, from liquid pearls to baroque pearls and every freshwater variety imaginable,” added Larry Lippert, Honora marketing director.

MARTIN KATZ SPREADS WINGS

Beverly Hills jeweler Martin Katz has decided to make his signature collection available to a few select stores. With his pieces often seen on Hollywood celebrities and retailers showing a lot of interest in his jewelry over the years, Katz became fed up with what he felt were numerous imitations of his designs, according to a Martin Katz spokesperson.

In addition to his own salons in Beverly Hills, New York and Rancho Santa Fe, Martin Katz jewelry will now be found at Alvin Goldfarb Jeweler in Bellevue, Washington, with a handful of other high-end boutiques also in the pipeline. “We are going with stores where we like their taste and what they stand for,” the Martin Katz spokesperson confirmed. “The stores skew to a sophisticated client where rarity is important and it is not just a price issue.”

The retail cost of most of the items in Katz’s signature collection ranges between about $3,500 and $50,000. Katz is hoping to open two new stores, in Newport Beach possibly in 2007 and in Las Vegas possibly in 2009.

BCA ACKNOWLEDGES ARTS SUPPORTERS

Several companies were recognized last month for their support of the arts in the United States during a black-tie gala night in New York attended by business and arts leaders. Sponsored by the Business Committee for the Arts, Inc. (BCA) and Forbes magazine, those presented with BCA awards for 2006 included Advanta, Bison Financial Group, Boeing Company, Fort Worth Star-Telegram, HCA, I.W. Marks Jewelers, Inc., Lincoln Financial Group, PNC Financial Services Group, Inc., Sabroso Company, and Time Warner Inc.

In addition, J. Barry Griswell, chairman and chief executive officer of the Principal Financial Group, received the BCA leadership award, and Humana was inducted into the BCA’s hall of fame. BCA was founded in 1967 by David Rockefeller to bring business and the arts together.

Article from the Rapaport Magazine - December 2006. To subscribe click here.