Retailers were generally relieved to report strong holiday sales for 2010, despite their initial concerns that consumers were not yet ready to shop. While average individual sales were somewhat smaller than they were several years ago, the end of 2010 marked a solid upturn after an erratic year, and most store owners and managers expressed optimism and a renewed enthusiasm about the independent jewelry industry’s chances to recover from the recession.
Happy Holidays
“Our holiday sales in 2010 were better than in 2009,” said Patrick Larkin, manager of Burri Jewelers in Cheyenne, Wyoming. “We sold Christmas items before Christmas. I think we sold more small-ticket items. But this whole year, we also sold quite a few 3-carat and 2.50-carat diamonds. I mean, there’s no profit in those big stones anymore, but it’s something that we sold. I think it means that the people who have money can spend money again.”
In Missouri, Woody Justice, owner of Justice Jewelers in Springfield, was cautiously upbeat. “Holiday sales were up 11.9 percent in December 2010,” he said. “We were up 10.3 percent for the year, and up significantly compared to two years ago. So we enjoyed the fact that customers came back to the table again, at least for a little while. But we worry about whether that was just a temporary loosening of the belt, and whether they’ll actually start shopping again. I’m not convinced that 2011 will be much better than 2010.”
In the Northeast, retailer Katie Goode saw some exceptionally positive numbers. “Our Hanover customers weren’t spending more than $400 or $500 per purchase on gifts, but that’s our college town,” said Goode, co-owner with Stephen Doubleday of Amidon Jewelers, with three stores in New Hampshire. “We came into December 2010 up 25 percent, though. In West Lebanon, we were up. And in our brand-new store in Claremont, we did in our first four months what we had planned for the first year.”
Planning Ahead
Despite the positive results of the December shopping season, retailers are still cautious about 2011. Most feel that for the coming year to be successful, it will take hard work and savvy thinking. “Our sales for 2010 were up from 2009, thankfully,” said Lula Halfacre, president, chief executive officer (CEO) and co-owner of Traditional Jewelers, with two stores in Southern California. “We had a very strong December.” Still, Halfacre is cautious. “I feel 2011 will be a bit better than 2010 in sales,” she said. “Our biggest business challenge for 2011 will be to continue to increase sales while making sure that our inventory reflects the turns necessary for profitability. Our investment of dollars will be with lines that are true partners.”
Smart spending is also a big part of the plan for Paul Geiss, owner of Paulo Geiss Jewelers in Charleston, South Carolina. “My biggest concern for 2011 is that nothing crazy happens in the world,” he said. “I hope the economy doesn’t tank again. We could take another hit, so we have to be very conservative in how we buy and not overspend, and only buy what we need.” That said, Geiss, who recently opened a Roberto Coin boutique in Charleston, feels that customers are ready to buy again. “We had a good year in 2010,” he said. “We were up more than 40 percent over the previous year. I think the economy is getting better and people are starting to spend again. Not everyone was really hurting. The people with money always have money, but they hold back. I think they just got tired of holding back.”
According to Goode, the regular events her stores hold are a big part of the reason she’s been able to stay ahead of the economic curve throughout the recession. “We have been exceedingly fortunate,” she said. “When the economy hit the skids for everyone else, each year after that was our best year. We belong to Continental Buying Group, and we sat in the meetings, and we listened to all the events that everyone did. So we made a pact in January 2008 to do an event every month. And we tried things that didn’t work, but we put ourselves out there. And that’s why we’ve been lucky.”
Fingers Crossed
The coming year may prove challenging, but almost everyone is hopeful about the prospects. “My biggest concern for 2011 is whether consumers will stay in the stores or go back in their holes again,” said Justice. “We’re watching our buying and our expenses, but we survived 2010, and were profitable. In 2011, I doubt that we’ll have a midyear slump like we did in 2010. Though if we grow, it’ll be cautious and quiet. We can be a little more optimistic about 2011’s consistency.”
The Marketplace
• Round is still selling best, with cushion and princess shapes tied for second.
• Light carats and 1-carat stones are top sellers.
• SI1 is the most popular clarity.
• The best-selling colors are H and I.
• 14-karat and 18-karat white gold continues to outsell platinum in all but the highest-end stores.
• The average price for an engagement ring, including stone and setting, is $4,750.
Article from the Rapaport Magazine - February 2011. To subscribe click here.