RAPAPORT... The 4Cs are not
the only things that make a piece of diamond jewelry a sales winner. In an
ongoing series, Rapaport Magazine 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: “Are the high prices of
precious metals and diamonds affecting what customers are buying and what you
are stocking?”
SCOTT RHODES, OWNER
A. SCOTT RHODES JEWELER
WILMINGTON, NORTH CAROLINA
“Customers are very price conscious; they’re very value
conscious. They’re very reluctant to buy heavy gold pieces because of the price
point. On the other hand, they see the value of gold, but it just doesn’t
translate into $140 a pennyweight and finish costs.
“In terms of diamonds, the big price increase has been on the
melee and I don’t really see a huge departure from what we’ve seen in terms of
the carat size and such. I can’t remember selling an engagement ring in years
that wasn’t over a carat. In our area, at least, the girls have to have a carat
stone minimum.”
DELL SHEFTALL, Chairman
and Chief Executive Officer
THE SHEFTALL CO., Jewelers
KERRVILLE, TEXAS
“No question that the average customer is put off by the
inflation of prices, which is really the devaluation of the dollar. We are, for
the first time in the 60 years of our business, beginning to carry some of the
designer sterling silver lines.
“The other end of the story is that our large-diamond sales
are up. People with big money, who don’t worry about where their next meal
comes from, are trying to hedge their money. There aren’t many things you can
put your dollars into and not worry about what will happen ten years from now.
We recently had a $150,000 sale and a $110,000 individual sale and I’m working
on a 16-carat diamond sale right now.”
ALICE HERRING, CO-OWNER
FORD, GITTINGS & KANE Jewelers
ROME, GEORGIA
“We are very fortunate and we feel very blessed to have a
very loyal customer base. They still have birthdays and anniversaries and
holidays to buy for and they like to come see us because they know they’re
going to get something of value. Are they spending as much as they did
pre-2008? Not necessarily, although some of them are starting to spend more
than they did in ’08 and ’09.
“As a retailer, you have to focus on what you can control, as
best you can: Make your retail environment like your living room and make it
very warm and inviting. Folks are hearing bad news everywhere; they don’t need
to hear it when they come in your store. They want to see wonderful and
positive. Our customers respond to that and they like that. And they come back
to see us and purchase.
“We do have a wide selection in silver, probably more than we
had three years ago. And also, we’re stocking more silver and gold, which we
have not done for a long time. Our customers like to see some of the gold
coming back and I think it’s almost fueled by the increasing gold prices. We
definitely have our share of the bead business and straight silver and things
like that. We want to make sure that we have something that they can have
wrapped in our pretty packaging that is in a price point they can spend right
now.”
JOHN WEEKS, OWNER
ARTHUR WEEKS & SON JEWELERS
PEEKSKILL, NEW YORK
“Yes, the rising prices have definitely changed what people
are buying. They’re buying a lot more silver. And yes, it’s forced us to keep
less inventory and buy more on memo as far as loose diamonds go.
“We are stocking a little
more silver designer pieces than before, more basics and the price points have
definitely come down a bit compared to what they had been.”
ROBERT T. BECHTEL,
MANAGER/SECRETARY, TREASURER
BECHTEL JEWELERS
WEST PALM BEACH, FLORIDA
“We don’t really inventory loose diamonds anymore; we bring
them in per call. I do inventory three-stone diamond rings, handmade platinum
rings, ready to go for people.
“Silver jewelry is what’s selling; fine-quality, sterling
silver and gold combination is moving. Gold is very tough right now. Some of my
heavy gold, handmade inventory has probably been re-priced three or four times
since the first of the year. It’s brutal.”
SCOTT CHRISTIANSEN, CHIEF FINANCIAL OFFICER
MARDON JEWELERS
RIVERSIDE, CALIFORNIA
“In terms of buying, I
don’t think we’ve noticed any difference in terms of people purchasing stuff.
We have seen people coming in to sell stuff, but that’s been fairly consistent
since gold prices have been going up. I don’t think we’ve had anybody
specifically say they’re not buying something because of the increasing prices.
I don’t think it’s been long enough to see the effects really take place. We
have taken on some silver lines for something in a lower price point, not
necessarily because of metal prices.”
SUSAN HARRISON, PRESIDENT
JEWELRY EMPORIUM
FORT COLLINS, COLORADO
“My staff says customers are asking for and buying more
silver. And I’m thinking of bringing in another silver line for Christmas. And
I’m thinking the $200 to $300 price point is going to be a good one again for
the holidays. I recently sold 2-carat diamond earrings and a
morganite-and-diamond ring and basically got my price.
“But I think the prices are affecting the jewelers more than
the customers. We have to be very careful not to pass our mind-sets on to the
consumer. I’ve been in business since 1978 and my customers trust me. If
retailers don’t act like we’re worried about the increases, we can pass that
attitude on.”
JOHN HAYES, OWNER
GOODMAN’S JEWELERS
MADISON, WISCONSIN
“Yes, we are stocking differently, looking at more of the
sterling silver items to restock. Customers are keenly aware of metal prices
going up. We’re also trying to focus them on inventory that’s already in stock
as opposed to ordering things. Number one, to give them a better price on
merchandise than a special order, and number two, to help reduce our own
inventory. But we’re also seeing a lot more people selling their gold and
silver items.
“When it comes
to diamonds, for the past year and a half, people have been compromising on
size to maintain quality and/or compromising on quality to maintain size. We’ve
seen both as diamond and precious metals prices have accelerated.”
BARBARA STRAUSS, CO-OWNER
STRAUSS JEWELERS
MOUNT VERNON, WASHINGTON
“I think for the younger customers, who don’t know any
different, it’s irrelevant, because it just is what it is for them. We lament
about how gold prices and diamond prices have gone up but they don’t know any
different. For those who are old enough to have lived through the lower prices,
it’s a factor. So, yes, I will be buying differently. This Christmas, I’m
watching my pennies. In the past two years, as gold prices went up, I have
invested in sterling silver designer lines that are sterling silver and gold
and colored stones.
“In terms of diamonds, in our store, we stress the quality of
diamonds. We’re not buying a different grade of diamonds. We’re educating the
customers and letting them make the choice. I know last Christmas we had fewer
diamond earring and pendant sales.”
Article from the Rapaport Magazine - September 2011. To subscribe click here.