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U.S. Retail
By Lara Ewen
The year ended predictably unpredictable, with a mixed bag of December holiday results and a resounding vote for cautious optimism in 2016. Record-breaking warm weather throughout much of the country made Christmas a hard story to sell to consumers, and light traffic led some retailers to believe they were losing sales to online stores. However, large-ticket items and custom fashion pieces did move, which was heartening. Looking ahead to 2016, most retailers were cautiously optimistic that despite the election year, sales might finally begin to stabilize.
For some retailers, the 2015 holiday season provided a healthy influx of early traffic despite unseasonably warm temperatures. “Christmas was busy,” said Ted Koester, owner of Herzog Jewelers in Fort Mitchell, Kentucky. “We haven’t tallied up everything yet, but it was busy early. Normally we don’t get busy until December 15, but this year we got busy around December 8. I would have thought the warm weather would make people not think it was Christmas, but no. It was all across the board, too. Stud earrings were busy, although not as hot as they’ve been in the past. And we sold more bigger-ticket items. And we beat last year.”
Other retailers also noted that customers were drawn to bigger-ticket items, as well as custom pieces. “Compared to 2014, year on year, we’ve noticed considerable gains,” said Jason Greenwalt, graduate gemologist at Neustaedter’s Fine Jewelers in St. Louis, Missouri. “November and December combined, we’re on pace to see double-digit increases this year over 2014. We introduced new promotions this year and December has been our most successful promotional month in the past five years. Also, we do one-of-a-kind pieces that are specific to our store, so that’s about time more than materials, and our margins are great for that. And although we thought silver lines would be great, we’re not selling the small stuff. We’re selling the big stuff at the bigger price points.”
Bigger price-point sales helped to ameliorate slower traffic, too. “Christmas was good and steady,” said Brandon Katzeff, owner of Joyce’s Fine Jewelry in Uniontown, Pennsylvania. “Traffic was down a little bit, but the pieces we sold were bigger, so that was good. And business was steadier throughout the season than it has been in the past, so that was positive. We sold a lot of studs and we did a lot of engagement rings. I think studs sold because they’re traditional, and in a year with so much uncertainty, people like studs because they’re safe. Also, our private label product is our best seller. Our customer wants something that’s unique to our store, something they can’t get online. So it’s been good overall. We’re about the same or a little ahead of last year. We can’t complain.”
Still, some stores had to contend with a rocky year that wasn’t ready to stabilize for the holidays. “2015 has been an off year for most months,” said John Hayes, owner of Goodman’s Jewelers in Madison, Wisconsin. “January and October were exceptions, but overall we’re down about 20 percent compared to 2014. So late in the season, I’m not really predicting this holiday season will be so good. With all the online shopping being done, brick-and-mortar retail is generally down, and we’re 20 percent behind December 2014 to date. We could still have some big sales to help the final total, though.”
In Colorado, Marc Feder, owner of Jay Feder Jewelers in Denver, also saw soft holiday sales. “Our numbers were off about 10 percent over 2014,” he said. “We were on pace through the summer, and then October was very soft. The traffic was much slower and we had a serious drop in activity. Christmas saw a late surge, though, and the last two weeks were strong, so I still have to tally the final numbers. But the business has become such a different animal. The last five to seven years, you may get that extra bonus in December, but your whole year has to be strong.”
Despite mixed reports, retailers were cautiously optimistic, as usual, that the coming months would be more predictable, despite political concerns. “2016 is an election year, but it’ll be fine,” said Koester. “I think business will be status quo until November, and then we’ll see a bump one way or another depending on who gets elected. But the economy has come back. I wouldn’t call it strong, but it’s not bad.”
Greenwalt agreed. “We’ve noticed the economy is recovering,” he said. “For 2016, we’re hoping to spend a little money and grow our budget, because putting in extra time and having late night wine and cheese parties have started to pay off. And our clientele isn’t worried about an election. We have some pretty sound customers.”Article from the Rapaport Magazine - January 2016. To subscribe click here.
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