As fall began, retailers were looking ahead to the end of
the year and trying to figure out what the rest of 2017 might bring.
Unfortunately, the outlook, even this close to December, wasn’t quite clear due
to a series of tumultuous months for the industry, coupled with wildly
divergent reports from various stores on sales and traffic. Some retailers have
seen positive year-to-date figures, while others have struggled. As such, even
stores that were flourishing were nervous that the good times might not last.
The erratic nature of US diamond retail sales means that
some stores have been doing exceptionally well in 2017.
“This year’s been really good,” said Doug Jones, owner of
Dale’s Jewelers in Idaho Falls, Idaho. “We’re up over 25% for the year, and I
hope it keeps going.”
Jones attributed the uptick to an increase in online and
social media advertising, and also to business his store had picked up after
another local store near his shuttered. He said he was seeing a lot more
bridal, and a demand for colored-stone engagement rings set in yellow or rose
gold.
“I had a July like I’ve never had before,” he remarked.
“Customers just kept coming in. And August was the same. Plus, we do a lot of
repair work. I’m shocked at the amount of repair work I do. It could be people
fixing things up instead of buying new, or maybe they’re just taking better
care of their things.”
In contrast, some stores were struggling to find a balance
as sales and traffic numbers fluctuated.
“It has been an up-and-down year,” said Ted Koester, owner
of Herzog Jewelers in Fort Mitchell, Kentucky. “Some months are killer, other
months are dead. There seems not to be any rhyme or reason to the traffic and
consumer spending.”
Koester said his store was still doing well overall for the
year, but that it felt like a roller coaster. He pointed to a variety of
factors contributing to the instability, but said it was hard to name one
single reason.
“It’s partly the weather and partly the political climate,”
he said. “But I don’t have a firm handle on the reason for the ups and downs.”
So what will the holidays be like? “I think the rest of 2017 will be the same,” said Koester.
“I think the year will end up okay, but it will be late coming, and only so-so.
I just feel that the trend will continue until Christmas.”
Jones was equally cautious.
“I think the jewelry industry is going to consolidate,” he
said. “You’re going to have fewer jewelers. I’ve had a national ad for a bench
jeweler out, and I’ve only had two phone calls. I get the impression that there
aren’t many people coming up in this industry, which means there are going to
be fewer jewelers. But the ones who hang on will do well.”
Despite how well his own store has been doing, he added, he
knows it isn’t the norm for the industry right now.
“I’m hearing it’s soft around the country,” he said. “I talk
to the vendors, and they tell me that stores are closing, and that it’s hard.”
He said even he was missing a specific kind of middle-market
customer that used to represent the core of his business. “The customer I’m
missing is the guy who comes in over and over, who’s in a more mature part of
his life,” he said. “There used to be a lot more of those guys.”
Article from the Rapaport Magazine - October 2017. To subscribe click here.