Rapaport Magazine

U.S. Retail

By Lara Ewen
Changing Times

Second-quarter numbers have begun to come in for 2015, and while the story is mixed, the mood among retailers is good. Many were optimistic that the toughest days of economic austerity were finally in the rearview mirror. Not every community has recovered, but spring’s thaw brought back a few hibernating customers and Mother’s Day provided a nice midseason boost. Bridal, an important segment, was also solid, although some of its rules have changed. Overall, expectations were high that the rest of 2015 would see modest, but positive, increases over 2014 numbers.

Bigger Sales, Lighter Traffic
   There has certainly been plenty of positive news on the retail front, with some jewelers reporting their best numbers in years. “We’ve had a record three months for the first quarter of 2015,” said Steve Samaras, owner of Zachary’s Jewelers, with two stores in Maryland. “Each month beat every other month we’ve had, year on year. We had some major, significant sales of big-ticket items and there seems to be a resurgence of the single large sale. I think customers are still very cautious, but feeling better about things.”
   Larger single-item sales have also been noteworthy at Glitters Fine Jewelry in Leawood, Kansas, though they have not impacted the bottom line yet. “2015 has been very similar to 2014,” said co-owner Debbie Berkowitz. “We have not noticed any significant changes. The biggest change was Mother’s Day. Volume was down, but average sale price was up.”
   Elsewhere in the Midwest, Bob Moeller, president and director of sales at R.F. Moeller, with three stores in Minnesota, was seeing impressive sales overall. “2015 has had a good start,” he said. “Our fiscal year just ended in April 2015, and we’re already off to a much better start this year than last year.”
   Moeller, who has adjusted his marketing focus to direct more attention to younger customers and more affluent customers, has found that becoming more upscale has helped his business a great deal. Of course, he also noted that times have changed. “A few years ago, people were saying they didn’t feel good about spending money when other people were having problems,” he said. “But now, there’s been some recovery, and you don’t hear about bankruptcy and foreclosures every day. But people have also learned to live differently. I mean, look at how much silver we’re carrying.”
   Even jewelers who have not yet seen big increases year on year are feeling upbeat about business overall. “2015 feels better even though we are a bit behind our year-to-date 2014 numbers,” said Steve Quick, owner of Steve Quick Jeweler, with three Chicago-area stores. “Our team is gelling and the momentum they are creating is exciting to see.” Quick added that his store is also making changes to its buying habits. “We will begin a shift in focus regarding our buying this year,” he said. “Our brand has always been associated with artistic, impeccably curated pieces. We intend to concentrate on quality pieces with great stories across all price points.”

Still Struggling
   Some jewelers, however, were still struggling. “January is never terrific and in February, we were effectively only open nine or ten days due to weather,” said Stewart Brandt, owner at H. Brandt Jewelers in Natick, Massachusetts. “March was nothing to write home about, either, but April showed signs of life, and May finally helped my checkbook. I think it was weather and a lot of the affiliated results of the weather, like weather-related damage to people’s homes. And the economy is still bad. The everyday Joe hasn’t had a raise in a long time.”

Bridal Changing
   Happily, the wedding and engagement business continues to provide a steady stream of customers. New trends are also having an impact. “Seventy percent of our business is bridal, so it’s very important to us,” said Quick. “It is also the least profitable part of our business when diamonds are in the equation. The biggest breath of fresh air is Todd Reed, and all things that fall under the heading of ‘alternative bridal.’ A segment of our Millennial customers is rejecting the traditional ideas of what an engagement ring should look like. The more they stray from tradition, the more possibilities we have for adding profit.”
   Quick added that Pinterest has had a major influence as well. “Pinterest is the real sea change,” he said. “Pinterest allows us to actually look at examples of what our customers are looking at and would like to own.”
Quick and many others jewelers have also welcomed same-sex customers. Legalization has had not only an impact on the bottom line, but also on customer relations. It has been an effective force for word-of-mouth public relations. “Same-sex marriages have had a very positive effect for us,” said Samaras. “When people find someone who respects who they are, or find a store where it makes no difference who they are, they appreciate that. So from a business standpoint, this has been a real positive.”

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

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