Rapaport Magazine

U.S. Retail

By Lara Ewen
Spring Thaw

Winter has finally ended, and so, too, have flat, frozen sales. Stores reported healthy first-quarter sales, with very encouraging double-digit year-on-year increases. It seemed that spring brought with it desire for larger stones, which in part fueled the resurgence of bigger-ticket single sales. Self-purchasing was also on the rise.
   Still, there were challenges. Retailers continued to bristle at competition from online stores, and were also actively trying to court a younger clientele, as older customers age out of their jewelry-buying years. Overall, the attitude was optimistic, excited and ready for Vegas.

Up and Up
   Warmer temperatures have put customers and store owners in a good mood. “I think business is recovering,” said Eve Alfillé, owner of Eve J. Alfillé Gallery and Studio in Evanston, Illinois, a Chicago suburb. “It’s not as busy as we’d like, but there are signs of recovery. For us, this manifests in clients buying things just for the fun of it, just to please themselves, as opposed to obligation gifts, such as anniversaries or weddings. Even the wealthy had budgets in mind over the past five years, but now we’re at the point where people are coming in again to have some fun.”
   Sales are generally strong across the country, though some store owners are reserved about making predictions. “Regarding the first quarter of 2014, it’s been okay, but it’s not back to where we want it, though we’re steadily growing,” said John Nichols, sales manager at Huntington Jewelers in Las Vegas. “The market is back. It’ll never get back to where the bubble was, but that wasn’t a real number anyway. Now, customers are doing things they wanted to do years ago, and there’s not as much hesitation on making buying decisions. Customers also don’t hesitate in pulling the trigger on a custom design, and people are accepting the prices.”
   Of course, not everyone saw massive upticks. “February was very good, but March was dead,” said Hy Goldberg, owner of Safian & Rudolph Jewelers in Philadelphia, Pennsylvania. “My son said, ‘You have to take two months at a time.’ But I think the weather had a lot to do with it. In 2014, we had six snowstorms of more than six inches. So we work our sales numbers as we go.”

Courting Younger Customers
   In the Northwest, appealing to a younger demographic led to a big boost. “Business has been very good,” said Kathy Cary, diamond buyer at Skeie’s Jewelers in Eugene, Oregon. “We are easily up 20 percent year on year from last year. The economy is better, and we drank the Forevermark Kool-Aid, and it has been very good for us. It has a really good story, and the story is very inviting for young consumers. I don’t mention Forevermark is De Beers, because De Beers still has a negative connotation. But Forevermark sells diamonds, and young people, under 30, come in and they ask for it. I think it’s one of the reasons we’re doing so well. Forevermark is one of the biggest tools in our toolbox these days.”
   The internet can also be a huge boon in attracting new customers. “We’re up 70 percent year-on-year,” said Jeneane Passarelli, owner of Schapell Jewelers in Boulder, Colorado. “We moved a year ago, and we have continued to pick up lots of new customers with our move. We’ve also gotten great reviews on Yelp, and every new customer says they saw the great Yelp reviews for us.”

Upcoming Shows
   With an improving but unreliable economy, the upcoming show season should prove interesting. Some retailers are eagerly anticipating JCK, and some are planning to skip all the shows this year. “We used to go to trade shows and this year we’re going to zero, we’re just not,” said Passarelli. “We have a good rapport with people we use and companies we trust and we’re loyal to those brands just as we want our customers to be loyal to us. I don’t like buying. It’s the worst part of my job. So I haven’t gone for four years, and I don’t plan on going.”
   Still, Vegas is important to a large number of retailers. “We are going to Vegas,” said Cary. “Everything is bigger in Vegas, but it’s easy to lose perspective at the show. We go to Vegas because you can see things that you cannot see anywhere else, but there’s only ever one or two new things you’re looking for.”
   Even those who do go to the shows have mixed feelings. “We go to JCK, but I hate shows,” said Nichols. “I spend as little time at the shows as possible. Other people come to town to have a party, but I just go there to see what’s going on” in the market.

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

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