Rapaport Magazine

U.S. Retail

By Lara Ewen
Recovery Mode Pushes Sales Up

As summer drew to a close, reports from retailers indicated that the economy had finally entered recovery mode. Sales figures were up, though not dramatically, and higher-ticket items, such as large solitaires and expensive designer pieces, were selling again. Although store owners weren’t sure who or what to thank for the improved numbers — a healthier economy, a more optimistic consumer, a more cheerful media — it didn’t seem to matter. Everyone was just breathing a sigh of relief, hoping for a joyously busy holiday season ahead.

Signs of Improvement
   Reports from around the country indicated that customers were coming back to jewelry stores, and that they were ready to spend. “I think the economy is really turning around, and things seem to be looking up,” said Bill Jones, president of Sissy’s Log Cabin, with three stores in Arkansas. Jones, who spent much of the recession expanding his business, feels that a large part of the downturn over the past few years was more psychological than financial, anyway.
   “Realistically, 95 percent of Americans weren’t really affected by the recession,” Jones said. “The people who were buying jewelry weren’t hurt that much. They were just worried because they were told to worry. And you know, our business didn’t really have a downturn during all that time. We’ve been growing. And people are always going to get engaged and have birthdays and anniversaries.”
   Of course, some places did suffer deep economic setbacks, but even in those areas, harbingers of better times began to appear this past spring and summer. “This area is saturated with builders and real estate people, and those folks got hit hard when the recession hit,” said H Bredemeier, owner of H & H Jewels in Coconut Grove, Florida. “And they’re coming back into the store. Single-family home sales here are back up to 2007 levels, and my business has been decent all year.”

Gold Numbers Drop
   Another possible sign that the economy was getting back on track was the slowing pace of customers coming in to sell their gold. According to Eric Wagner, co-owner of Showcase Jewelers, with three stores in Kansas, the sharp decrease in his gold business might actually turn out to be a good sign. “We seem to be lacking in gold purchases,” he said. “So either the economy is better, and people aren’t selling their gold because they have more money, or they’re just out of gold. But we can definitely tell that the gold buying has dried up and that is making it very difficult to reach 2012 numbers in one of the stores.”
   What has been selling for him? “We’re seeing a resurgence of people buying more unique and one-of-a-kind items,” he said. “And estate jewelry from the 1920s and ’30s seems to be hot.”
   On the East Coast, customers were feeling cheerful again, and for multiple reasons. “2013 began slow and steadily picked up through the summer,” said Evans P. Siskel, co-owner of DVVS Fine Jewelry in New York City. “If the final quarter of 2013 maintains the current momentum, we’ll end up about 5 percent higher than 2012.” Siskel credited the growth to consumer confidence, a bolstered stock market and, notably, a drop in gold prices that made more customers willing to buy higher-end pieces.

New Bridal Market
   Siskel also credited some of his uptick to the new marriage legislation for the lesbian, gay, bisexual and transgender (LGBT) community. “Among all the variables that affect the economy, and the jewelry industry in particular, it would be wrong not to mention the bump we’ve seen in wedding rings and engagement rings for LGBT clients,” he said. “Now that the Supreme Court changed the game so drastically, it is clear that many homosexual partners have been waiting for the chance to tie the knot.”
   In the engagement business, it’s not only LGBT couples who are shifting the landscape. According to Gail Friedman, owner of Sarah Leonard Fine Jewelers in Los Angeles, women have been playing a much bigger role in the selection process. Friedman, who has also been seeing a large increase in solitaire engagement sales, said that 2013 was an exciting but challenging time.
   “It’s been very busy all year,” she said. “If I only knew why. I think some of it is the economy. People are just loosening up. And the engagement customers are spending a lot, and a lot more than they used to.” Some of that, she said, is “because women are not waiting to trade up anymore. The couple spends their money the first time.”
   Although times are changing, Friedman feels positive about the future. “I think things are steadily improving,” she said. “Anyway, that’s my hope and my wish. I think we’re on the uptrend, finally. That’s the way it feels.”

Article from the Rapaport Magazine - October 2013. To subscribe click here.

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Tags: Lara Ewen