Rapaport Magazine

U.S. Retail Market Report

Full Sale Ahead

By Lara Ewen
RAPAPORT... Holiday 2007 got off to a strong start, with retailers reporting equal or better sales month-on-month in November. While some retailers said that early reports were not necessarily the best indicators of the holiday season ahead, most retailers seem extremely optimistic about the coming season.

Sales Are as Good or Better Than Last Year
At Steve Quick Jeweler in Chicago, owner Steve Quick reported, “We’re having the best year in the history of our business,” while at Tiny Jewel Box in Washington, D.C., president Matthew Rosenheim said, “Our sales are exceeding expectations. Business is trending quite strong, and I expect it to be a good season.” At Sissy’s Log Cabin in Pine Bluff, Arkansas, president Bill Jones attributes much of his current sales figures to the agricultural gains experienced in his region. “The farmers have done well this year, so we’re seeing a great attitude from them,” he stated. “A lot of their success is biofuel driven, and it’s affecting all the grains.” Jones reports that at Sissy’s, “sales are way above last year. Month-on-month, we’re up 50 percent.”

Elsewhere in the country, early holiday sales were in keeping with last year’s margins, though some stores caution that early holiday reports may not be indications of what’s to come later in the season. At Gleim the Jeweler in Palo Alto, California, manager Rick Velayo, who is also the president of the California Jewelers Association, said, “We are on track, at this point, to last year,” noting that for Gleim, holiday sales don’t really begin until after Thanksgiving. “We consider our holiday season to start on the Friday after Thanksgiving and end on New Year’s Eve,” he said. “In fact, early November is the lull before the storm.”

Steve Tapper, vice president and general manager of Tapper’s in West Bloomfield, said that Michigan has had a very tough year due to continuing issues in the auto industry. But even with the tightening belts, he’s seeing decent returns. “Sales are about the same as last year,” he says. “It’s been great that we’re able to do well in difficult times.”

Special Items Are Big Sellers
Most stores noted that for the holiday, customers were going for new and special items. Accessories, such as watches, necklaces and earrings are strong, as are larger-sized stones and cuts such as Hearts on Fire. Another popular holiday buy is wedding jewelry. Said Velayo, “At this point, I am doing well in diamond engagement rings. It must be the right time to ask someone.”

According to Tapper, exclusive items are what draw customers in now. “Anything that is more exclusive for us typically does well. Even in a difficult economy, there is a segment of customers who want to buy something unique and distinctive.” At Sissy’s Log Cabin, Jones commented, “We’ve been good with black diamond beads and necklaces up to five strands. We also do well with accessories in black and white diamonds.” In Washington, D.C., Rosenheim is seeing a trend toward larger sizes in everyday pieces. “People are buying pieces that are very day-to-day wearable, but also expensive. They’re buying things that are luxurious and sizable.” In Chicago, Quick is seeing strong sales in large diamond hoops and pavé hoops, which, he said, is “a direct play from the various red carpets this year.”

On the other hand, some items that have done well in the past are soft this season. Pavé and micropavé are slowing a little at both Sissy’s Log Cabin and Tiny Jewel Box, and Sissy’s is also softening when it comes to colored stones such as pink diamonds. That’s also true at Tapper’s. According to Tapper, “Color does not sell especially well. We’re buying gorgeous merchandise with color, but people like white diamonds.”

Yellow Gold is Gaining Ground
In terms of metals, one of the surprises so far has been the strength of yellow gold. “Yellow gold has come back to some degree,” stated Tapper, “and that’s been good because it offers us an opportunity to do something different with people.” Jones agreed. “At Sissy’s, we’re seeing a small trend back to yellow gold. A year ago, we were only selling platinum.” Jones also sees movement in white gold, which he attributes to price, and to the X1 alloy, which he says doesn’t yellow like rhodium. Quick is seeing younger customers trending a little away from white metals as well. “Some of our youngest couples are asking for yellow gold, but it’s too early to predict a change yet,” he said. Quick stresses that white metal and platinum are still leading the way, and Velayo agreed, noting, “White metal is best.” It appears that in retail, it’s going to be a white holiday season after all.

The Marketplace
• Early holiday sales figures are meeting or exceeding last year’s numbers.
• Average price for holiday purchase is $2,000.
• Average size is 1.5 to 2 carats.
• Average clarity is VS1 to SI2
• Average color is D through G.
• Favorite metals are platinum for engagement rings, and white metals for everything else, with some stores seeing a small trend toward yellow gold.

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

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