Rapaport Magazine



By Phyllis Schiller
RAPAPORT... The 4Cs are not the only things that make a piece of diamond jewelry a sales winner. In an ongoing series, RDR explores the “3Ws” — what’s selling, what’s not and why — by going straight to the people who really know — jewelry retailers. Each month, we ask a sampling of retailers to comment on the important issues that are facing the industry today. Here is what they had to say when asked in late November: How is Christmas going? Are holiday shoppers buying this year?

“It’s too early to find the trend yet, but it’s not going badly. People are shopping early but they aren’t spending as much money, at least not the early shoppers. I’m sure later shoppers will be different. Early shoppers are always going to shop well. They’re still buying nice diamonds. Quality and sizes are still pretty good.”

“We’re seeing traffic; it’s not dead. But it’s certainly reserved. We’ve seen Christmas shopping but it’s modest. We haven’t seen a real start to the Christmas season yet.
“In terms of diamonds, people are still getting engaged and married and still looking for quality.
“We’re a bit of a unique operation in that we’re a relatively small footprint but we do a very significant volume of business out of that footprint and we normally maintain very large inventories, much bigger than anybody else our physical size. But, even though business was actually pretty good, for the most part, right up through September, we were cautious at the show in the spring and a little bit conservative in our buying because we sensed a slowdown in the economy. But in terms of the inventory mix, it’s pretty similar to what we normally would have done, just maybe fewer units. In the past six weeks, there’s certainly been a slowdown in the higher tickets, but that’s not surprising.”

“The traffic is pretty good; it’s going pretty well. We buy a lot of scrap gold and that’s bringing us new customers, which has contributed to selling more, too. Once they’re in the store, they’re buying. We also do repairs and we do a coupon in mailers offering a $3 chain repair. That seems to bring in customers.
“The average sale is definitely down. But we’re getting more of them.
“We’re seeing a lot of diamond sales: pendants, rings and diamond wedding bands. Price, price, price is the main thing. They’re buying smaller engagement rings this year. I don’t think we’ve sold anything over a carat and a half in a month.”

“I would say it’s a little bit early to tell, but I am cautiously optimistic. Traffic seems to be okay, but people are being very careful. As a retailer, I’ve been very careful going into this fourth quarter. Fourth quarter tends to be a good time for our store and October was definitely quiet with the economic climate and the political climate and everybody being unsure of what’s going on. I’m hoping for the best and trying to be positive.

“We’re a small, independent American Gem Society (AGS) store and we always do an open house. This year, I am doing something a little special with a marketing group out of Fort Lauderdale, offering a gift certificate to some of my customers toward a purchase. It’s not something I’ve done in the past, but I’m hoping it will incentivize sales and make people not so cautious and afraid to buy.

“I think honestly the higher-end things are not affected as much nor are the things that are a little bit unique.”

“We’re prepared, like everyone else, for the state of the economic situation. But Forbes.com rated Oklahoma City as the top recession-proof city in the country — and I have to tell you that while we are not going gangbusters like we were, we’re still doing very well. We’re being very conservative in our buying and very conservative in our advertising but we’re a hundred-plus-year-old store and we have the privilege of being able to do that. The sales are happening; we’re just having to work much harder and get more creative on adding value.

“We are starting to see foot traffic for preliminary shopping. And in times like these, we’ve seen that, with all the doom and gloom coming at them on every screen, people want to make themselves feel better. And, hopefully, they consider jewelry for that purpose.

“This year we added only new product from existing lines. Once September rolled around and all the news started hitting, we decided to buy only what we absolutely have to and need to. We’re pretty much using common sense. But we’re optimistic about the season. People who have wealth and buy higher-end things still want to have a merry Christmas and/or happy Hanukah.”

“In 2007, Christmas was kind of awful for us because of the writers’ strike and we really had a bad November and December. This year, of course, we were hoping that we could make improvements on last year, because how bad could it get? And now we’re looking at it and saying, ‘Well, how bad can it get?’

“So far this month, our business has been good, it’s up from last year, but last year was an off year. If it continues into December like this, it will be an okay December.

“We are seeing holiday traffic. I am getting a lot of customers coming in and looking at things and making notes, at least in their heads, of what they want to get. So we’re not necessarily making the sales at this moment, but people are thinking about it.

“This year, we’re setting ourselves up to be a little bit different from the basic jeweler up and down the street. We’re making many more of our pieces in-house. We’re doing a lot of things in necklaces and colored stones, in silver and gold and gold-filled, all handmade. And they’re going very well. We bought very little at the JCK Show and normally we buy a lot. What I did buy was the kind of materials we could use to prepare and make the items. And we’re doing very well with that just by doing things a little bit differently.

“Diamonds are pretty soft right now. We do a lot of mountings for diamonds but we find that most of our clients are going elsewhere to buy their diamonds — either online or what have you. And big diamonds are not a prosperous event for us. We make very little on a large diamond, and then hope to make some money on the mounting. I can compete pricewise with the internet, but I can’t compete when customers have to pay sales tax on $10,000.”

Article from the Rapaport Magazine - December 2008. To subscribe click here.

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