There’s been an almost audible collective sigh of relief
regarding first-quarter sales for 2012. Holiday pulled through at the end for
almost everyone, but the sales came in very close to the end, so much of early
2012 has been spent waiting for a sales slump that doesn’t seem to have kicked
in. Even stores that aren’t experiencing record-high sales are still seeing
better sales than they expected, which bodes well for the coming show season,
since what sells must be replaced.
FIRST-QUARTER FIGURES
The big story is that almost everyone feels the recession is
waning. “So far, 2012 has been very good,” said Chuck Wallace, owner of Wallace
Jewelers in Bethlehem, West Virginia. “We’re up over 20 percent year on year
compared to 2011. People had a tendency to hold back in 2011, and in 2012,
they’re releasing a lot of that. I’m already on track to make this as good as
any of my better years.”
Sales increases aren’t always steady, however, and while the
worst of the nail biting is over, even hopeful retailers are playing it
cautiously. “So far, 2012 has been interesting,” said Richard Neustaedter,
owner of Neustaedter’s Fine Jewelers in St. Louis, Missouri. “The people who
have money are spending it, though I think most jewelers are surviving by
buying and selling gold, and on engagement sales. Still, we’re excited. In
February 2012, we reached one-quarter of our month’s goal in four days, but at
the end of the month, it just died. Then March, which is generally slower, was
good. I think people’s attitudes are better because of the nicer weather.”
The unseasonably warm weather throughout much of the country
certainly has played its part in encouraging shoppers to get out and buy. Even
stores that haven’t been excited by 2012’s sales figures have noticed the
weather’s role in bringing in business. “For us, 2012 has been down 25 percent
over 2011, year on year, which itself isn’t great,” said Eve Alfillé, owner of
Eve J. Alfillé Gallery and Studio in Evanston, Illinois, a Chicago suburb. “But
on the first warm day, the store was like a mob scene. This winter was warm,
but the first really warm day brought people out.”
With the ups and downs of a slow recovery, even slight
increases in profit margins are welcome. “The first part of 2012 has been
encouraging,” said Kathy Corey, vice president of merchandising and co-owner at
Day’s Jewelers, with five stores in Maine and one in New Hampshire. “However,
growth has been very moderate, as we expected. During the first few months of
2011, we experienced single-digit increases over 2010. We are seeing a similar
type of performance in 2012 over 2011.”
Jim Jessop, owner of Jessop’s in San Diego, reported “2012
started out comparatively slow for us, slower than I’d like, and it has not
picked up yet. Prior to tax time, though, it’s always that way. The first
quarter of 2011 also was weak but the year ended with a good strong finish. I
have every indication this year will be the same.”
RETURN TO SHOWS
With a decent, but tentative, start to the year, it’s harder
to make decisions about which shows to attend. In recent years, many have
simply opted out of all but the biggest shows, because there was no need to
replenish stock that wasn’t moving. Times are changing, however. “I went to
Tucson this year for the first time in three years, and I’m going to JCK,” said
Jessop. “Other business owners and other jewelry store owners are optimistic,
and we are all anticipating a stronger 2012, and we’re looking forward to JCK,
knowing that we’re going to need to buy. It’s a shift up, but it’s a very
cautious shift up. We’re just all real shaky, but optimistic.”
Other retailers go shopping not just to replenish, but to
stay competitive. Wallace goes to Antwerp each year in order to find special
merchandise that will allow him to compete with online retailers. “Some of the
best sales I have ever made have been when I have found the exact diamond for a
customer in Antwerp,” he said. “I do a countdown clock to tell people how long
it will be until Wallace Jewelers goes to Antwerp. And I say, I won’t buy a
diamond without seeing it first, and you shouldn’t buy a diamond without seeing
it first.”
LOOKING AHEAD
Whether business travel is in the forecast or not, store
owners are feeling pretty good about this year going forward and they’re remaining
hopeful for economic recovery or, at the very least, stability. “I think in
2012 we’ll continue to realize small increases over 2011, likely in the
mid-single digits,” said Day. “I expect we’ll see diamond sales increase as a
percentage of our overall sales.”
Neustaedter is even more upbeat. “If you’re optimistic, then
good things will happen,” he said. “Most of the customers who come in my store
are in a good mood, and I think 2012 is going to show great improvement.”
The Marketplace
- Round is the top-selling shape, followed by princess cuts.
- 1-carat stones are moving the fastest right now, with
1.5-carat stones close behind.
- SI1 is the most popular clarity.
- G-H is the top color range.
- In settings, platinum and 14-karat white gold are
practically tied for popularity.
- The average price for an engagement ring, including stone
and setting, is $6,625.
Article from the Rapaport Magazine - April 2012. To subscribe click here.