The holidays are over, and with the New Year comes a collective sigh of relief from jewelers who were worried that maybe late December 2011 sales would not materialize. But business did come, and now, even in an election year, many stores are starting to see a light at the end of the recession, as customers begin to open their wallets again.
Christmas Past
Despite fears that holiday might not happen at all, retailers found that late shoppers came out in droves, and sales were as good or better than expected for almost everyone. “Holiday sales were pretty good, considering the economy,” said JJ Slatkin, general manager, Jay Feder Jewelers in Denver, Colorado. “Overall, we were up 7 percent. I would have been happy if we’d been even. Between Labor Day and Thanksgiving, it was completely dead, and it wasn’t until a week or two after Thanksgiving that people really started to spend.”
For some stores, the numbers were even more impressive. “Our December 2011 sales were up double digits from December 2010,” said Michael S. Karaman, president of James Free Jewelers, which has two stores in Ohio. “Overall, we were way higher in 2011 than we were in 2010, and we had a record year in 2010. We were worried that we couldn’t match that, but I can say the recession hasn’t hurt us so far.”
While not everyone was immune to the recession, even those who had difficult times saw improvements by the end of 2011. “Our holiday sales went quite well,” said Katie Goode, co-owner with Stephen Doubleday of Amidon Jewelers, with three stores in New Hampshire. “It went better than 2010. The first part of 2011 was tough and the second part of the year got much better. 2010 just stunk.”
In Hawaii, business was also strengthening. “Holiday sales were good,” said Karin Knudsen, general manager of The Wedding Ring Shop in Honolulu. “They were definitely better than in years past.”
Even stores that didn’t see record improvements felt that overall business was improving. “We had a good holiday season in 2011, but it was behind 2010, because we didn’t repeat some of the large sales we had in 2010,” said Georgie Gleim, owner of Gleim the Jeweler in Palo Alto, California. “But those large sales were just a fluke. Overall, 2011 was a much better year than 2010. It looks like things are getting better.”
Looking Ahead
In spite of mostly positive news closing out 2011, retailers are keeping a watchful eye on the economy. “In 2011, people were hoping things were getting better, but they were not sure,” said Slatkin. “It seems that in 2010 and 2011, people were waiting for signs that the world wasn’t going to end. People are now coming to the conclusion that our world has gone through this kind of thing before, and this isn’t the worst we have faced.” He said there’s a sense that “we came through that and we can come through this. People think it’s getting a little better, but they don’t think their job security is very high, and that’s not good for our industry because people don’t really need anything we sell.”
Gleim agreed, and said simply, “The economy is our biggest challenge. We’ll address it by continuing to do all the things we’ve always done, and do them well. 2012 will be full of surprises, but it will be a good year.”
Prepared to Work for It
Retailers seem ready to buckle down and work hard. “To some extent, things are improving economically,” said Knudsen. “I worry about things I know I can affect. Our ongoing challenge is to keep the client experience at the highest level. This company has been on a nice growth pattern for years. The focus of who we are, in terms of being The Wedding Ring Shop, has helped. People are always going to get married. I imagine that jewelers who are more dependent on fashion pieces have probably suffered.”
For some stores, working hard is also about working more effectively. “We fired our marketing agency,” said Goode. “Our business had been going down, and the money we were spending on marketing wasn’t returning our investment. We felt the consequences of our actions in a way that they didn’t.” Goode added that “living on the edge keeps us constantly promoting. Anytime I hear about a jeweler going out of business, I think, there, but for the grace of G-D, go I.”
Looking ahead, it seems that while the hard times are not quite over, there’s a thrill in the air again. “I was never so excited in the past 15 years as I am for 2012,” said Karaman. “We’re already ahead of 2011 year on year, and we’ve actually got our schedule planned for 2013. We think forward.”
The Marketplace
- Rounds lead in sales, as always, with princess and other square cuts coming in second.
- Stones of just over or just under 1 carat are doing well right now.
- SI1 is the most popular clarity, with VS2 a close second.
- G-H color is the current top seller.
- 14-karat white gold is tied with platinum in setting sales.
- The average price for an engagement ring, including stone and setting, is $6,800.
Article from the Rapaport Magazine - February 2012. To subscribe click here.