Rapaport Magazine

Vegas Productive for Buyers

U.S. Retail Market Report

By Kate Rice
RAPAPORT... U.S. retailers were entering summer returning — and recuperating— from JCK Las Vegas and working with quality-minded clients. Alexis Gilbode, buyer for Ross-Simons, which operates nine retail and four outlet stores from Georgia to Maine, said that she was buying for the fall and holiday season, with her main goal being bridal purchases because she’s planning on revamping Ross-Simons’ selection. The show, as always, was too big, “no matter how long you stay, you could have stayed longer,” she said, although she completed most of what she intended to do.

Jack Winer, president of Shreve, Crump & Low, in Boston, who was buying for the Christmas quarter at the show, found it a “very productive” show. He praised the concentration of luxury items in Prestige Pavilion and Luxury, two areas on which he focused. Being able to target these areas kept the show from becoming too overwhelming, he said. He also liked the Italian Pavilion VicenzaOro because it was very much a piece of Italy in Las Vegas, with vendors he doesn’t normally see at the Las Vegas show.

Winer and Gilbode are both dealing with quality-focused clients. Gilbode stresses that Ross-Simons is committed to selling its customers absolutely the best diamonds and tries to deliver that message to customers any way possible, right down to a recorded quality commitment message from Darrell S. Ross, president and chief executive officer (CEO), which plays when customers phoning the company are placed on hold.

Certs Count

Shreve, Crump & Low is selling 1-carat to 1-1/2-carat diamonds in F color and better, according to Winer. “Shoppers are really working the GIA [Gemological Institute of America] reports,” he said. “They’re very aware and getting more aware all the time.”

During the spring, the store saw strong self-purchasing among women buying designer jewelry, mostly earrings and pendants. The store, which underwent a change of ownership recently, is also marketing itself aggressively. One creative campaign: a concierge night. The flagship store’s location at Berkeley and Boylston in Boston is well-positioned to capitalize on the tourism trade. To keep the store top-of-mind among the concierges at neighboring high-end hotels, Shreve, Crump & Low invites them to an evening of cocktails, hors d’ oeuvres and raffles.

At Tiffany & Co., U.S. retail sales are up, primarily due to increased spending per transaction. That’s in part because Tiffany is selling higher-value pieces and also because diamond prices are up, according to Mark L. Aaron, vice president, investor relations, for the company.

“A good economy means a good environment for affluent consumers and that translates into people spending more per transaction,” he said. Diamonds continue to lead store sales. He added that the New York flagship store is benefiting from the strength of the euro and the pound; its sales have seen a 26 percent increase—a big increase on a big base—in large part because of European tourists capitalizing on their strong currencies.

At the Gem Gallery, Bozeman, Montana, owner Don Baide said that diamond sales are down, but the people who are buying are buying “absolutely top of the line.” The gallery is selling more internally flawless, top-quality diamonds. The same goes for settings. Baide’s customers are going for platinum, with hand engraving.

The Gem Gallery specializes in sapphires, specifically Yogo sapphires found only in Montana, and many customers opt for a combination of sapphire with diamonds. “What looks better than color accented by a diamond?” said Baide.

Terry Davis, owner of Towne Square Jewelers, Charleston, Illinois, is also seeing the quest for quality. Towne Square Jewelers is a dealer for Forever 10, a trademark round stone; it’s extremely bright and does very well with Davis’ more mature clients. “We’re seeing an interest in the better-cut stones,” he said and he capitalizes on that. “We see the make of the diamond as a critical factor, rather than just color and clarity.”

Custom Design

Towne Square Jewelers has a website, but it’s purely a marketing and information tool. Several years ago, with the advent of the internet, Davis decided that the future lay in custom work. The company has a matrix computer design system and its own mill, because the store sees a lot of people who are looking for something that they can’t just pick up off the shelf. Terms like “hand-picked” and “selected exclusively for you” are part of the sales team’s vocabulary.

Davis sees two trends, what he calls the high-volume, low-margin “supermarket approach” catering to the “lots of flash, low cash” customer and the more sophisticated segment of the market that wants the buying experience rather than just the product. These are customers looking for a piece that will become a family heirloom and that’s the customer Davis targets. “We’re emphasizing the experiential part of the shopping experience,” he said.

The Marketplace

• Top-quality cuts are doing well.
• Diamond hoops are the rage.
• Consumers start researching online but close the deal in a store.
• Word-of-mouth remains the best
marketing strategy.
• Yellow stones and gold settings are picking up.
• Platinum is still strong, especially in bridal.

Article from the Rapaport Magazine - July 2007. To subscribe click here.

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