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U.S. Retail
By Lara Ewen
2013: More of the Same ExpectedThe beginning of a new year is always a time for optimism, regardless of how the previous 12 months have gone. Right now, retailers are grateful to have the rockiness and unpredictability of 2012 behind them. Looking ahead, everyone would like to see more stability, and savvy store owners are suggesting that having levelheaded expectations will prevent serious disappointments. While no one expects the economy to recover overnight, or even by the end of 2013, it seems that jewelers are learning to play by the new rules and most are doing quite well, finally.
The bottom line on 2012 holiday sales is that the season was mostly successful, although not without its speed bumps. “We were above 2011
at both stores,” said Michael S. Karaman, president of James Free Jewelers, which has two stores in Ohio. “But it was different than any other year. The first week of the holiday season was perfect, and then the second week was totally flat. Then the final eight days were extremely busy, to the point that we could not even do custom pieces for people because it was so busy.” For Michael Han, owner of The Wedding Ring Shop in Honolulu, 2012 was up and down all year, so he was prepared for the worst when it came
to December. Fortunately, his year ended on a high note. “We had a record year overall,” he said. “It was also one of the best holiday years we ever had, by far. We saw this year as unpredictable, so we planned some very strong marketing for the fourth quarter to really drive sales. We drove customers in to the store. And this was the best year we’ve had, and we’ve never had a down year. But it becomes more difficult to do, to keep having increases. We’ve been fortunate.”
December was also brisk for Jim Jessop, owner of Jessop Jeweler in
San Diego. “Holiday was good,” he said. “That’s the first time I’ve been able to say that the holiday was a good selling period in the past four years. We’ve had clients return, and we’ve seen some real activity in the store. I think things are starting to ease up a bit and southern California is getting back into the financial world. The average ticket still has not begun to rise, though. We haven’t seen the larger tickets return yet.” Some retailers were simply relieved to be seeing flat sales. “Holiday 2012 was disappointing,” said Mike Lordo, president of Lordo’s Diamonds in Ladue, Missouri. “But when I say disappointing, maybe that’s not the right word because it wasn’t completely disappointing. Our December was down by only 1 percent over 2011. Throughout 2012, we’d seen a little bit of progress, and we were up in October and November 2012 and up overall for 2012 by almost 10 percent. So I’m pleased as punch. As long as we’re even, I’d be pleased with that.” Of course, not everyone was pleased with their year-end numbers. “Unfortunately, we were flat for holiday 2012,” said Ashley Davis,
buyer at Davis Jewelers in Louisville, Kentucky. “I truly feel a big portion of it was about the news, and hearing about the fiscal cliff every single evening. We had a similar number of transactions as we did in 2011,
but just smaller-ticket items. We did a high amount of marketing. We
did billboard, radio — so it wasn’t for lack of preparation. But I had customers flat out tell me, ‘I don’t know what’s going on and I don’t
want to spend anything.’”
Now that holiday is over, retailers are trying to get a handle on what’s coming for 2013. After the uncomfortable highs and lows of 2012, most would just like to see a little stability. “I think 2013 will be almost identical to 2012,” said Lordo. “Every year, we think we’re going back to 2008 numbers, but it’s not going to happen. 2013 is going to be just like 2012, and we’ll see a gradual 10 percent increase. And even if we’re just slightly above 2012, we’ll be okay.” Davis is also optimistic that the slump she saw at the end of 2012 is not permanent. “I think that once everything settles down, economy wise, and people know how they’re going to be taxed, they’ll come back and see us for Valentine’s Day and for Mother’s Day. I’m not overly afraid.” Jessop agreed. “I’m optimistic, but guardedly optimistic,” he said. “I don’t think we’ll see a return of the more significant high-dollar sale during 2013. People’s attitudes have been shocked by the duration of the turndown in the economy, and they’ve been reeducated as to the amount of money they can spend. And they’re not feeling positive about our government and our tax rates. But I’m optimistic that sales will be back.”Article from the Rapaport Magazine - February 2013. To subscribe click here.
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