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U.S. Retail
By Lara Ewen
After a 2014 holiday season that saw mixed, though mostly positive, results, 2015 is off to a sluggish start. Retailers continued to see a decline in mid-range purchases, and while high- and low-range sales helped the bottom line, concerns abounded regarding a disappearing middle that had once been so dependable. An increased demand for custom pieces was making up some of the difference, and most jewelers felt that this trend was nowhere near its peak. However, traditionally reliable events, such as Valentine’s Day, no longer hold the promise they once did, and most stores expected the February holiday to be slow.
As 2015 began, store owners weighed the results of an erratic December. “Holiday 2014 for us was strange,” said Paul Becker, owner of Becker’s Diamonds & Fine Jewelry in West Hartford, Connecticut. “The traffic pattern was not as predictable. Times when we should have been busy were quiet. My competition, too. I can also tell you, it’s my 45th Christmas in the business, and I would chalk it up to lack of consumer confidence in the economy. When people feel good and safe and secure in their jobs, they spend. Now on the other hand, we had two car dealership owners come in, and one said it was his best Christmas season in 65 years, and the other one said it was a phenomenal season. But being in retail is like being a farmer. You do everything right and then you depend on Mother Nature and the economy.” Not everyone was convinced the economy was a factor in Christmas 2014 sales, however. “Christmas 2014 was good for us,” said Hank Davis, owner of Davis Jewelers in Louisville, Kentucky. “It was better than 2013. I like to think it’s all the stuff we do. The catalog that we sent out got rave reviews from our clients, and we did a little more with social media, and I don’t think that hurt. I don’t believe the whole economy thing. People who blame the economy are just not working as hard as others. But between low gas prices and the midterm elections, which helped, we just had a good season.”
One important aspect of Christmas, which many believed would continue to impact 2015 sales, was a drop in mid-range sales. “For Christmas 2014, the average purchase price was down, but the profit margin was still good,” said Marc Feder, owner of Jay Feder Jewelers in Denver, Colorado. “I also did some very big sales. And the low is still there, but the mid-range has dropped off. It’s not entirely gone, but I’ll say this: We had a good season, though it was also very late. The last ten days were a mad rush, and we didn’t have an early surge.” Joe Strong, co-owner of Waterfall Jewelers, with two locations in the Detroit area, agreed that mid-range sales were weak. “This Christmas was kind of a higher-ticket season,” he said. “I think the middle is dropping out. Kids come in for Christmas gifts, and they buy low. Or guys buy gifts, and it’s high. It’s two different types of consumers. But overall, Christmas was really good. And we haven’t seen as much of a slowdown in Pandora. In fact, this year Pandora was back up.” For some stores, year-end sales never materialized. “Christmas was down by 20 percent,” said Christopher Eles, co-owner of Crown Fine Jewelry in Scottsdale, Arizona. “I couldn’t tell you why. Who knows? It was definitely slower, and the purchase price was smaller. People who used to spend $5,000 wanted to buy silver for a couple hundred. And so far, not much has happened in January. But maybe the months to come will be outstanding.”
While Valentine’s Day is no longer a big part of the jewelry retail scene, many feel that an increased desire for custom work will play an important part in the sales landscape of the coming year. “Valentine’s Day is a reasonably important holiday, but not tremendously important,” said Davis. “Christmas lasts 30 days and Valentine’s Day lasts three days. But one trend I do think is important is the whole customization thing. It’s going to be more and more important. More than one-third of our inventory is special order.” Strong agreed. “We’ll be seeing a lot more custom things in 2015,” he said. “Women are on Pinterest, and it’s amazing how many guys and women come into the store with pictures from Pinterest of a ring, and say they want something like it.” Moving forward, store owners were, as usual, cautious and optimistic. “No one has a crystal ball,” said Becker. “But the advantage of being independent means you can maneuver very quickly. I will give it my best effort and do everything possible to have the best year. And whatever I get, I get.”Article from the Rapaport Magazine - February 2015. To subscribe click here.
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