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U.S. Retail
By Lara Ewen
With the year almost half over, retailers were scratching their collective heads and trying their best to understand why sales have been erratic, or slow, or generally disappointing. Some blamed online stores, which continued to lure shoppers away from brick-and-mortar doors. Others suggested that consumer wariness was standard fare for an election year. Still others threw up their hands, figuratively speaking, and said it was impossible to really know what the problem was. Even the few stores not directly touched by bad news were at least privy to the negative feeling permeating the jewelry business. Still, the ever-sunny consensus was that after the election, sales and traffic might return to normal. Fingers crossed.
Sluggish sales made it hard for retailers to stay optimistic, particularly when it was not immediately clear why numbers were down. “I was hoping 2016 would be like 2015, but this was the worst March we ever had,” said Mike Lordo, president of Lordo’s Diamonds in Ladue, Missouri. “Maybe it’s because of the election year. The whole industry had a bad March. We would like to at least increase 10 percent every year, and we have most years, but we can’t figure this out. But I’m certainly optimistic. You don’t even count anything until December, so I think we’ll be okay for 2016.” Sales were also down for Judith Arnell, owner of Judith Arnell Jewelers, with one store in the Chicago area and another in Portland, Oregon. “It’s pretty slow,” she said. “2015 was better than 2014, which is good. But right now, we’re just flat. Online purchases are hurting brick-and-mortar, and every year it’s getting worse. It’s hard to compete with the big guys online.” Internet sales were also a cause for concern in New Mexico. Leslie Crothers, AGS-certified gemologist at Butterfield Jewelers in Albuquerque, also said election jitters might be additionally responsible for rocky 2016 sales. “It’s been a roller coaster,” she said. “An up month, and a down month, and an up month. But, bottom line, we’re falling flat to maybe a slight increase, and we have no idea why. And it’s going to be a roller coaster until election time. Then it could go either way. I don’t think anybody can predict what’s going to happen. Also, I think we’re losing a little traffic to internet sales. We’re feeling a pinch because of that.”
The bright side, at least as far as the overall industry is concerned, is that not all the news is bad. In fact, some stores are seeing relatively healthy growth. “As of the end of April, we’re up 12 percent over last year, and 2015 was our best year,” said Kathy Corey, vice president of merchandising and co-owner at Day’s Jewelers, with five stores in Maine and one in New Hampshire. “But we were 10 percent down in our traffic count for May, and we’re scratching our heads, trying to figure out what happened. Mother’s Day was soft, but I think that it’s a little soft for retailers in general, though, and not just jewelers, because we’re all competing for the same dollar. I mean, Kay Jewelers had a 30 percent storewide sale. I think ‘desperate’ might be a bit harsh, but people are aggressively seeking the consumer dollar.” Up north in Alaska, the outlook was even brighter. “Business has been great,” said Mindi Robuck, co-owner of Michael’s Jewelers in Anchorage. “We hear about businesses closing, of course, and we pay attention to what’s going on, but we haven’t felt any of that here. We heard from some designers that a lot of accounts they had in the lower 48 states have closed, and when I heard the number of stores closing, I was surprised. But we’re nice and steady, and right where we were in 2015.”
As sales fluctuate, some stores are finding new ways to make up for lost diamond sales. “We sell way more color than we sell diamonds for engagement,” said Arnell. “We’re even selling synthetic diamonds that we’ve had to special order. People come in and ask for them. We don’t usually carry them but I guess more and more people are starting to, and my go-to diamond dealer is even thinking of carrying them.” Arnell also said that in Portland, Oregon, diamond demand was down from 2015. “People don’t want to show their wealth,” she said. “They’d rather spend their money on vacations and food and wine.” For Crothers, what sells best is what’s most affordable. “Pandora is selling very well, as is moderately priced jewelry,” she said. “A lot of it is sterling.” Crothers said that high-end jewelry was not moving well. For Carey, who is seeing a similar softness in diamonds, it’s an industry-wide issue. “Diamond demand was a little soft for April, though still better than 2015,” she said. “As an industry, we need to come together and create a desire to own fine jewelry again. We’ve become so commoditized, but we can bring the romance back. And it takes a whole village to do this.”Article from the Rapaport Magazine - June 2016. To subscribe click here.
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