Rapaport Magazine

U.S. Retail

By Lara Ewen
A Surprisingly Good Year

The 2013 retail season slid into a surprisingly strong finish, with final tallies putting overall sales at or above 2012 numbers despite some turbulent months. Naturally, the up-and-down year left many retailers hoping to catch one last big wave of shoppers during the holidays, but since consumers have been waiting until the last minute to do their buying, most stores were doing a lot of hand-wringing right up until the end. Even so, hopes were high that 2014 would bring about a more stable economy and a continued rise in sales — and spirits.

Closing Out 2013
   Most retailers felt positive as 2013 came to a close, and for obvious reasons. Business was up and the economy was improving. “2013 was certainly better than 2012,” said Richard Neustaedter, owner of Neustaedter’s Fine Jewelers in St. Louis, Missouri. “We’re up by 16 percent over 2012 for the fiscal year. I think the economy is still tough, and people are concerned about Obamacare, but I also think people are moving on from that.”
   As concerns about another recession dissipated, customers who had held back began buying again. They might not have returned in droves, but the improvement still seemed palpable. “Business is going well,” said Doug Jones, owner of Dale’s Jewelers in Idaho Falls, Idaho. “I think customers are back. I wouldn’t say the economy is completely back, but it’s going in the right direction.” Jones, who said he was ahead of 2012 “by 10 percent or 12 percent,” also said he had been selling more exotic colors in 2013, including tourmaline and fancy color sapphires in oranges, pinks and peaches.
   Finding the right merchandise mix in 2013 was a critical part of the plan for Michael S. Karaman, president of James Free Jewelers, which has two stores in Ohio. “2013 has been up over 2012 by double digits,” he said. “I think the economy is getting better. But also, we buy sharper, we know what we need, we listen to our market and we know what our customers want. And if something isn’t doing well, we say, ‘Thank you very much’ and we part company.” Retailers can’t afford to carry lines that don’t produce, according to Karaman, because “floor real estate is very expensive in this industry.”

Unpredictable Year
   Naturally, not all of 2013 was positive. Some months were better than others. “Overall, 2013 is going to turn out to be a good year, but not a great year,” said Michael Han, owner and president of The Wedding Ring Shop in Honolulu. “In January 2013, it started off very scary, but from February to September, it was strong. We were in double digits. Then in October and November, I’m not sure if it was politics or the sequester, but it was fairly soft. By December, it seemed we’d be even with 2012, which was our best year. Overall, we’re seeing a high-single-digit increase over 2012. But it was an unpredictable year.”
   It’s unclear why the year was rocky. “The first half of 2013 was very strong,” said Jim Jessop, owner of Jessop’s in San Diego. “We had a strong year, but our summer months got quieter than we expected. Then we started back up for holiday season, and I think holiday 2013 will be on par with what I’ve seen the past few years” when the final numbers are tallied. Even though the year ended well for him, Jessop remained a bit uneasy. “We started out so strong in 2013, and I had the feeling that the economy had some strength,” he said. “Then it stopped in June and got quiet for June, July and August. My concern is that I can’t come up with a good reason why that happened.”

Beyond the Holidays
   While Christmas shoppers have been arriving in the stores later each year, hopes were high that the end of the year would bring glad tidings, and that 2014 would see profits continue to climb, albeit slowly. “I pace the floor and wait for the final four days before Christmas,” said Jones. Noting the importance of his male customers who come in at the last minute every year, knowing they will find something to buy, he said, “I think guys aren’t sure what to do, and I bail them out every year, so they wait and don’t worry about it.” Despite the preholiday tension, Jones felt good about what’s ahead. “I say business will be up in 2014,” he said. “We have a good economy in my area.”
   For Jessop, late Christmas shopping is just part of the new normal. “Holiday just was very slow to start,” he said. “I think 2014 is going to be better. We’re through the worst years, and we just have to allow optimism to develop.”
   Karaman is practically the poster child for that optimism. “I don’t know what 2014 will be like,” he said. “We’re hoping great, but I don’t know. But I’m not worried. We have a saying here. ‘We don’t care about making money. We just like to sell jewelry.’”

Article from the Rapaport Magazine - January 2014. To subscribe click here.

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Tags: Lara Ewen