RAPAPORT... The 4Cs are not the only things that make a piece of diamond jewelry a sales winner. In an ongoing series,
Rapaport Diamond Report explores the “3Ws” — what’s selling, what’s not and why — by going straight to the people who really know — jewelry retailers. Each month, we ask a sampling of retailers to comment on the important issues that are facing the industry today. Here is what they had to say when asked in late November: Are you adjusting prices of current inventory to reflect increases in the price of gold? How are your customers reacting?
MARK HAYDEN, OWNER
HAYDEN JEWELERS
LIVERPOOL, NEW YORK“Of course you have to adjust prices. But I don’t adjust them every day. I wait for a couple hundred-dollar moves on the metal to make all the adjustments. It’s just too much work to do otherwise. It does affect what you buy as new stock. Because of the movement of the metal, you’re not selling as much gold, as much chains, but you’re still selling the diamonds and the precious stones.”
JEFFREY ROSEMAN, PRESIDENT
DAVID HARVEY JEWELERS
NORWALK, CONNECTICUT“I don’t reprice existing inventory. But we do have a computer system that allows us to put in replacement costs for one purpose only, which is if we have to reorder or get any additional different lengths or customize it in any way, shape or form — obviously, that is going to raise our costs of the goods. We have to be knowledgeable and be prepared. But I want to be a much better value. We have always run a really strong inventory, which allows me to basically be more competitive than anybody else who has higher-priced inventory.
“In terms of the price of gold, the only thing that made me stop and think was the amount I inventory in men’s gold bands, which are pretty generic, so cost is absolutely critical. I have taken a little bit of a wait and see what the market does on that, or buy as is needed. But if you talk about fashion jewelry, I’m still doing business with a lot of people who haven’t readjusted this year because they’re selling by piece. Designer companies know if they adjust, quite honestly, they’re going to have a bad Christmas. Chain is a different story; it’s purely by price and weight and you just kind of wean into that and adjust inventory on an as-needed basis.”
TIM GREVE, PRESIDENT
CARL GREVE JEWELERS
PORTLAND, OREGON“For us, the majority of our product is branded product, so we market at the manufacturer’s suggested retail. We make changes when the manufacturer makes changes to suggested retail. We haven’t had any pushback from customers. I’d say the only noticeable effect we’ve seen is in bridal, with gold and platinum prices so close. For a while, bridal customers were shying away from platinum based on the cost but, with the current prices, they’re opting for platinum rather than gold since there’s not a whole lot of difference.”
TIMOTHY QUIGLEY, OWNER
TQ DIAMONDS
MADISON, WISCONSIN“We have continued to reprice our stock inventory or designer inventory as our vendors have updated their prices. But if we have an item from Stuller that’s been on the shelf for 18 months, no, we have not increased the price of that in the past 12 months. But a ring from Tacori, yes, we are priced at their current prices as of July.
“People like to see printed prices because they believe that’s the true or real price. Customers have sticker shock when prices are printed in a catalog and then you have to point out that the catalog is priced at $600 gold and currently gold is at $1,100-plus. There’s sticker shock there because they see a price of $200 and, in turn, you have to quote them a price of $325. That as a retail practice is not working successfully at the moment.
“There is definitely some sticker shock on the platinum side of jewelry, especially in the men’s wedding band category and also slightly in ladies’ engagement rings. And that’s still pretty much the rebound of platinum going from $800 to $2,500 and backing off to $1,300. It’s never recovered the momentum it had when it was in the $800s or even when it was at $1,000. I’ve found people are finding alternative ways to deal with the issue. Men’s bands have gone from being platinum to, on the high end, being palladium, and a lot of people are requesting tungsten and titanium. So I would say that our average ticket on men’s wedding bands is down from where it was 12 to 18 months ago.”
THOMAS WIGGINS, MANAGER
BIXLER’S JEWELERS
WHITEHALL, PENNSYLVANIA“Mostly, we don’t reprice. On a new order that we get in for stock, of course, that will reflect the increase. On the older orders, we just have a normal markup based on what we bought it at. Where that changes is in gold wedding bands. Those we have tagged at the price that we bought them at but, with the market changing so fast, we can’t just change tags every day. So what we do is we call and get customers a current price when they pick out the style that they like. And most everybody has been understanding about it, they are aware of the high price of gold and the change in metals, except for palladium, which really hasn’t changed that much. We usually get no negative backlash for the higher price. With manufacturers of fashion designs, like David Yurman and John Hardy, pieces come in already priced and customers are aware of them because the price is the same no matter where they buy it. If they go online to look at the pieces and then come in here, they don’t experience any sticker shock.”
DANIEL GORDON, PRESIDENT
SAMUEL GORDON JEWELERS
OKLAHOMA CITY, OKLAHOMA“We basically do not adjust our prices due to metal unless it’s a designer line and it’s required to keep the consistency of the brand pricing. In essence, we have a lot in common with the larger superstore model because we have a huge inventory. There have been lots of deals for consumers because, even though the industry average is just one turn, we may have pieces that are older but still current in style that we can work with in order to make that sale. So there’s a plus and a minus. When metals go up, we can use it to our advantage by not upping the price and by using it as a closing technique.”
MICHAEL MELNICK, CHIEF EXECUTIVE OFFICER (CEO)
ARMEL JEWELERS
SARASOTA, FLORIDA“As we replace, we go to current prices. We’ve pretty much held the line on our old pricing to offer our customers exceptional value. And we try, as an American Gem Society (AGS) store, to educate them on that value.”
Article from the Rapaport Magazine - December 2009. To subscribe click here.