Rapaport Magazine

U.S. Retail

By Lara Ewen
2014 Out With A Bang

Holiday 2014 began late and held more than a few surprises for retailers. While stores had been pushing holiday promotions for months, with some starting as early as October, gift sales did not really begin to take shape until the middle of December. When customers did start buying, it seemed that affordable goods and very-high-end pieces moved well, but the mid-tier, including diamond solitaire earrings and 1-carat stones, did not sell as well as expected.
   Overall, however, retailers reported a small but healthy uptick in sales over 2013’s holiday season, with most seeing year-on-year increases in the high single digits. So, while none of this is a guarantee that 2015 will continue to see economic improvements, most store owners ended 2014 full of glad tidings and good cheer.

Year-End Sales
   Although 2014 overall has been up and down, sales in December picked up toward the middle of the month, giving retailers a terrific boost at the end of the year. “It’s been a roller coaster all year,” said Richard Neustaedter, owner of Neustaedter’s Fine Jewelers in St. Louis, Missouri. He said his Christmas sales were good, though there were some changes this year, including a dwindling interest in diamond solitaire earrings. “But compared to 2013, we were up by 8 percent. Diamond studs aren’t selling like they used to, and people care more about price than quality. But cluster earrings and pendants sold, and a lot more people are going after personalized pieces.”
   The year also ended well for Ted Koester, owner of Herzog Jewelers in Ft. Mitchell, Kentucky. Koester said that his overall 2014 business was “very good. Better than last year,” and added that he was “running ahead of budget.”
   The hardest part of this year’s holiday was how difficult it was for retailers to predict what would happen. “We find each year, December’s sales do not follow the same pattern. So you can never predict, since there is so much potential for large-dollar sales to be made on any given day,” said Michael Han, owner of The Wedding Ring Shop in Honolulu, Hawaii.
   Fortunately, Christmas was a success for Han, even though the holiday took its time getting underway. “Christmas went really late,” he said. “We’ll take it, but business came in late in the month. It’s still coming in after Christmas, because there are a lot of engagement purchases coming in for New Year’s. We have had more expensive diamond fashion and engagement sold, and this holiday definitely was stronger than 2013. But what was notable about this Christmas was that people seemed to be coming in and buying more readily, as opposed to shopping around. I think it’s because our website lets them browse ahead of time.”

Crediting Hard Work
   Online efforts also paid off for Brandon Katzeff, owner of Joyce’s Fine Jewelry in Uniontown, Pennsylvania, and Joyce’s Jewelry Boutique in Morgantown, West Virginia. “Both our locations were up for holiday 2014 over 2013,” he said. “For us, I don’t think it’s the economy. We’ve been aggressive and creative with our marketing, we eliminated all newspaper advertising and we’ve been doing social media aggressively. It’s been long hours and hard work, but it’s been worth it.”
   Hard work was also a running theme for Michael S. Karaman, president of James Free Jewelers, which has two stores in Ohio. “I worked seven days a week from the end of October through Christmas,” he said. “We had a lot of shows every month. And Christmas was really interesting. Both stores were up over 2013, and one store was up in double digits. But usually we sell more middle to high, and this holiday, we sold lower and higher, but the middle shrunk. I hope it’s not a trend, and that it was just December. We saw it for holiday, but had not seen it all year. The lower-end, least-expensive pieces were flying out the door, and then the 4 carats to 6 carats, even 10 carats, were moving very well. I was floored, honestly.”

Outlook for 2015
   With the resounding single-digit year-on-year increases for holiday, store owners were feeling positive but still wary about the coming year. Han cautioned that the business was changing. “I believe 2015 will be very good for retailers who have planned well and executed their plans, reinventing the way they do business,” he said. “But not for those who keep the status quo.”
   Karaman was also cautious. “When you look at the figures, we did extremely well,” he said. “But the middle-priced merchandise didn’t move. It might be a bit concerning for the future, if that’s a trend. So right now, we’re being cautious.”
   “I’m encouraged,” said Neustaedter. “But I was that way earlier. And people still love jewelry. It’s the love for the jewelry, but it’s also the love for your wife, your girlfriend. So my outlook never changes. I always expect the most, and I think 2015 will be even better than 2014. I feel great.”

Article from the Rapaport Magazine - January 2015. To subscribe click here.

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