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U.S. Retail
By Lara Ewen
For many retailers across the U.S., spring could not come soon enough. Ice, snow, bitter cold and completely unpredictable weather patterns made for an unstable start to 2014. In-store traffic has been down, but those who could were making up for that with fresh new ecommerce sites. On the plus side, larger sales were reported, with bigger stones and higher-ticket jewelry moving well. On balance, profits were up, and hopeful store owners looked forward to a prosperous season ahead.
“Business was terrible in January, due to the weather,” said Mike Lordo, president of Lordo’s Diamonds in Ladue, Missouri, near St. Louis. “But we may have had the best February in our history, and it could be a good March. We had big sales, sold larger stones and had young kids coming in and looking at 1.50-carat and 2-carat stones. It’s weird, because it seems like you used to see 15 or 20 sales on a good day, and now you might have only seven sales, but two of them are big sales. So it’s not the number of sales receipts, but the amount on the receipts. And now, compared to 2013, we’re already 30 percent up.” Rough winter weather was also a factor in the Northeast, but bigger sales made up for it. “In the first two and a half months of 2014, we saw some nice increases, about 10 percent year on year,” said Kathy Corey, vice president of merchandising and co-owner at Day’s Jewelers, with five stores in Maine and one in New Hampshire. “We’re seeing some increases in our business, and March is looking healthy. Even with the winter snowstorms, it’s encouraging news to us. Our traffic counts are flat compared to 2013, but our average sale has climbed by quite a bit, and our diamond sales are up about 10 percent year on year.” Even in normally balmy climates, frigid temperatures hurt bottom lines. “We lost two days in January because of the ice,” said Richard Lee Mathis, owner of Symmetry Jewelers in New Orleans, Louisiana. “So January 2014 was way off from January 2013 in sales, and we were very concerned. But then in February, we had a record month, and we did about 30 percent more year on year. And March started strong. So it’s hard to predict, and we’re still being cautious.” Although weather wasn’t a big concern, sales were unpredictable at Carreras Jewelers in Richmond, Virginia. Tamara C. Toms, operations manager, said sales out of the showcase were down for the first two months of 2014 by about 30 percent, year on year. However, it wasn’t all bad news. “Profits are up, and repair sales are up,” she said. “In fact, we’re busier with repairs than sales.” Of course, in some parts of the country, snow is no big deal. “The one upside to being someplace that has extreme winters is that when it gets more extreme, no one cares,” said Babs Noelle, owner of Alara Jewelry in Bozeman, Montana. “We’re up so far in 2014. Way up. Traffic is up, and the closing ratio — meaning how many people who come in actually buy — is up. We have just been rocking it.”
One of the biggest challenges facing independent retailers right now is bringing in more traffic, and specifically, younger traffic. “Traffic is a challenge in the industry,” said Corey. “That, and being relevant to the younger customer. They love our product, but they’re not coming in to our store.” One way stores are learning to counteract the lack of traffic is by increasing, or developing, an online presence. Mathis is currently in the process of redoing his website, and now has a full interior walkthrough of his store on Google Maps. Toms is also hard at work with her online presence. “We’re trying to get our ecommerce website up and running,” she said. “There’s a lot of ongoing work to upload info from our existing point-of-sale system.” For Noelle, the work is almost done. “We have been working very hard on an ecommerce site,” she said. “I don’t believe in doing things fast, and I needed something that would work. We’re hoping to launch April 2014.”
A long, difficult winter and a slow-starting spring make even upbeat retailers somewhat reserved regarding their expectations for the rest of the year. “I think 2014 will remain unpredictable,” said Mathis. “But I’m always optimistic. We manage pretty well.” Corey also held back her enthusiasm, and chose her words carefully. “I feel confident and somewhat optimistic, with caution,” she said. “I think the industry will continue to see incremental, small improvements, but the days of double-digit improvements are over. Consumer confidence is slowly picking up, but we’re seeing competition from iPad, cell phones and experiential purchases such as trips.” A few store owners, however, are hoping for great things. “I think the rest of the year is going to be good,” said Lordo. “The economy is good and it’s going to stay good. The way it’s going, people are opening up a little more. 2014 is going be a good year.”Article from the Rapaport Magazine - April 2014. To subscribe click here.
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