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U.S. Retail
By Lara Ewen
The holiday season, traditionally a make-or-break time for retailers, arrived with an air of optimism. This year, store owners were feeling comfortable, if not giddy, and customers were shopping again after a slow October. A shaky but generally positive economic outlook prevailed, and sales of basics, such as solitaire earrings and colored stones, were healthy even before the holiday rush officially began. Most jewelers indicated that even a small increase over 2013’s numbers would be enough to make this year end on a bright note, and all indicators pointed to a solid holiday season.
While there were many factors at play this year, one of the biggest reasons customers gave for cautious shopping was trepidation regarding midterm political races. According to Paul Geiss, owner of Paulo Geiss Jewelers in Charleston, South Carolina, shoppers loosened up after the November elections. “I think the 2014 holiday season will be slightly better than 2013,” he said. “People are a little more comfortable after the election.” Even with a more relaxed clientele, though, expectations for this year’s holiday season were modest. “I think holiday 2014 is going to be somewhat similar to holiday 2013, with maybe a little bit of an increase,” said John Hayes, owner of Goodman’s Jewelers in Madison, Wisconsin. “Maybe 3 percent. Not a lot. The year has been up and down, and people are still not certain about the economy, even though the midterm elections are over.” On the West Coast, the mood was slightly better. “We’re the most optimistic we’ve been in six or seven years,” said Jim Jessop, owner of Jessop’s in San Diego. “We’re headed for a great season. I expect a doubling of 2013’s strong showing. My client’s view of the economic future has finally improved, and sales have been strong since October. Holiday presales are also the strongest ever.” There was also pronounced optimism in the Northwest, where an early chill and a few well-placed decorations had shoppers thinking about Christmas further ahead of the holiday than usual. “I think holiday is going to be pretty good,” said Doug Jones, owner of Dale’s Jewelers in Idaho Falls, Idaho. “The year’s been better than 2013. Not a ton better, but I get a good feel. And I’ve had a few more early holiday shoppers than normal. I’ve had customers talk about making Christmas plans and purchases in the first part of November. Having our decorations up already might also have been a bit of subliminal marketing.” Sales were not as robust in the South, however, and Benny McNair, owner of McNair Jewelers in Gadsden, Alabama, was concerned but optimistic. “We might be down this year,” he said. “People all over are saying there’ll be a 4 percent increase this season. I think the election being over will help, because the economy is a matter of perception, and if people could feel better about it, they’d start spending. But my gut feeling is that we might be down.”
Retailers were expecting that staples, such as diamond solitaires, would be big sellers this holiday season because cautious customers tend to buy more traditional pieces. Color, which was strong all year, was also expected to sell well in December. “Basics, like diamond earrings, will be strong for holiday,” said Hayes. “Guys like basics because they’re safe. Colored gemstones will also have a bit of an increase over 2013 because color makes people feel better.” Some of those same trends were also strong in the Northwest. “I design a lot of my own things,” said Jones. “This year, it’s a mix of diamonds, mixed metals and colored stones. And diamond earrings always do well.” Color was also important for Jessop. “Color is stronger than we’ve seen in years,” he said.
Looking ahead to 2015, subdued optimism was the prevailing mood. “We have opportunity for growth next year,” said Hayes. “Not big growth. Maybe 5 percent. It’s not like 2005 to 2007. But I think it’s going to start to turn, and I think the guys on the hill will start to play together.” Most store owners agreed. “I hope next year will be better,” said Geiss. “Seems like people are starting to spend again.” Jessop was also feeling bullish. “I see no reason for this uptrend to stop in 2015,” he said. “Let’s hope the news stays positive and optimistic.” For Jones, it was as much about attitude as it was about economics. “I’m always optimistic,” he said. “If gold comes down, people will start thinking about jewelry. I don’t pay much attention to the economics, but I want to make sure my shelves are full and I don’t want to contribute to any worry. I’m thinking that I don’t know what’s going to happen. But I’m having fun, and I’m doing the stuff I want to do. And that makes the customers happy.”Article from the Rapaport Magazine - December 2014. To subscribe click here.
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