As the 2011 holiday season lurched into its final weeks,
retailers anxiously waited for the buying rush that in recent years has hit
later and later. Most jewelers acknowledged the large number of late-season
shoppers and the stress of waiting for those last-minute sales. But while
holiday is still an important time for padding the bottom line, store owners
and managers also were looking ahead to 2012 and trying to keep a positive
outlook, even as slow December 2011 traffic put everyone on edge.
Waiting and Hoping
Holiday sales are extremely important to the annual revenue
totals of most independent jewelers, but getting those crucial customers in
2011 was not easy. “About 25 percent of our annual business is holiday,” said
Paul Geiss, owner of Paulo Geiss Jewelers in Charleston, South Carolina. “But
business is way off. Our first ten months were good but, toward the end of
November, things started to slow down.” Even so, Geiss acknowledged that a lot
of shoppers probably wouldn’t come in until just before Christmas. “About 70
percent of our business is last-minute male shoppers,” he said when interviewed
just before Christmas. “We are hoping for a very late Christmas.”
Shoppers also come late in the season in Pennsylvania.
“Holiday sales are the bottom line,” said Mac Ahmad, vice president of
Bartikowsky Jewelers in Wilkes-Barre. “It’s 40 percent. December is your month
to make it, and you think about things that you can sell, or move, or do. I
don’t know if customers were waiting for sales or what. But we expected it to
pick up the week of Christmas Eve. It seems like a trend over the past ten
years that the season starts late.”
On the West Coast, even though the story is similar,
optimism is high. “We’re expecting our 2011 holidays to be better than 2010,”
said Lula Halfacre, president, chief executive officer (CEO) and co-owner of
Traditional Jewelers, with two stores in Southern California. “The economy is
getting better, and we anticipate the final weeks of December will be awesome.
Holiday sales are very important for us. They’re roughly 20 percent of our
overall sales, and we buy all year for our fourth quarter.”
For Scot Congress, owner of Congress Jewelers, with two
stores in Florida, sales during the end of the year also are vital to his
bottom line. “The period between November 25 and December 24 is one of our most
profitable 30 days,” he said.
At some stores, though, especially where engagement is the
biggest part of the business, the holidays are not a make-or-break time of
year. “Holiday sales are always critical, but for us, it’s about 15 percent of
our annual total, and not 35 percent, which is what a typical jewelry store
might be,” said Brant Kane, diamond buyer, general manager and partner at E.E.
Robbins, with two stores in Washington state. “Engagement, which is our main
business, is a little more user-specific. Those customers are as likely to wait
for a January vacation to propose, so our December engagement sales are
basically not much higher than a good June.”
The Year Ahead
Looking forward to 2012, retailers are wary. Many are taking
a wait-and-see approach. “The economy was bad in 2010, and it’s been bad in
2011,” Ahmad said before Christmas. “We’re selling some high-end stuff, and some
bigger stones, but the bread-and-butter stuff that people usually buy, they’re
not buying, because they don’t have the income. We hope the market starts to
turn around, but right now, we’re just trying to get through the end of 2011.”
Geiss was also cautious as he awaited the final sales week
before the holiday. “Unless the 2011 holiday season goes really down, I think
things will be about even in 2012,” he said. “It’ll be about the same as 2011. I
think we won’t get through this downturn until after the election.”
Underlying Confidence
Big-picture issues are also a factor in Halfacre’s outlook.
“The new year is going to be busy and challenging, and I hope sales will be
better,” she said. “As long as the government is doing what it can do, and
unemployment improves, and people have confidence, things should improve. This
is America. We get it done.”
For Congress, sales already are starting to take a turn for
the better. “Most of our clients are of a more positive mind-set,” he said. For
2012, he predicted a 10 percent increase over 2011.
For others, expectations have been modified to fit new
economic realities. “I’m very upbeat for 2012,” said Kane. “My version of
upbeat has been reclarified for the economy as it is, but people are now
officially sick of waiting, and they’re moving forward with their lives. 2012 won’t
be off the charts — like 2007 was — but we’ll see a nice steady growth, in
small increments. I’m realistic, and expecting 2 percent increases. So I’m
upbeat for the first half of 2012, and if that goes well, I’ll be upbeat for
the second half.”
The Marketplace
- Round continues to be a top seller, with cushion cuts
selling second best.
- Demand is for either .90 carats or 2 carats and up.
Middle-range stones do not sell as well.
- SI1 is the most popular clarity.
- G-H is the best-selling color range, though I also sells
in better clarities.
- 18-karat white gold and platinum are tied in setting
sales, due to the high price of gold.
- The average price for an engagement ring, including stone
and setting, is $19,000 for high-end and larger stones, and $4,800 for smaller
stones.
Article from the Rapaport Magazine - January 2012. To subscribe click here.