Rapaport Magazine

U.S. Retail

By Lara Ewen
Jittery Consumers Unnerved by Election

It’s been a rocky year for jewelry, as retailers dealt with wildly unpredictable traffic amid regular reports of store closings. By summer’s end, some retailers reported flat figures, year on year. Others reported slight increases, due in part to higher single-ticket sales. Everyone was eager to see the end of the presidential election cycle and expected that December would bring a positive uptick in both traffic and sales, regardless of who won. However, most stores were still playing it safe and elected not to buy additional merchandise for the holidays, just in case the year continued its loopy roller-coaster course.

Uneven Sales
   One of the biggest issues in 2016 to date has been its unpredictability. While bridal was a bright spot, many retailers expressed concern that it wasn’t enough to keep the industry going. “It’s super bumpy,” said Russ Varon, co-owner of Morgan’s Jewelers, with one store in Torrance, California. “It’s all engagement rings and watches. People aren’t buying fashion anywhere in the country, and people are just not wearing jewelry. It’s not cool. I don’t know what’s going to happen to this business. We’re kind of doing okay, and on par with last year. Maybe even up from last year. But I’ve been fortunate and Rolex helps.”
   Sales also fluctuated for Lance Buttars, owner of Molinelli’s Jewelers in Pocatello, Idaho. “This year has been really interesting,” he said. “I was on par with 2015, which was decent, and then May and June were horrible. We were down 40 percent from previous years, and my friends’ stores in other parts of the country experienced the same thing. It was just a whole bunch of really bad days when it didn’t even pay to open the door. And that was during engagement season.” Buttars said that the election was potentially to blame. “Once the primaries were over, we saw sales go up,” he said. “August was unexpectedly good.”

The Election and Other Factors
   The election was also a consideration for Patrick Larkin, manager of Burri Jewelers in Cheyenne, Wyoming. “Election years tend to be a little slower, because people don’t know what to prepare for,” he said. “But people are still buying engagement rings. And people are buying more of the bigger stuff. And the people who have the money are spending it, and the people who don’t, aren’t.”
   International issues may also have contributed to flat sales in bigger cites. “It’s been okay,” said Fernando Schlaen, general manager at Richard’s Gems & Jewelry in Miami. “We have nothing to cry about and nothing to brag about. It could be the election, or it could be the foreign economies. We don’t have as many international visitors as we used to. Traffic is down, but sales are flat, which means our customers are buying higher-ticket items. Maybe people go online for cheaper items, and only come into the store for big-ticket items.”
   In the Midwest oil and agricultural areas, jewelry sales were particularly hard hit. “2016 so far has been very tough,” said Eric Wagner, co-owner of Showcase Jewelers, with two stores in Kansas. “The first quarter was one of our worst in many years, but June and July seem to have flattened out.” Wagner was hoping for a good December, however. “I think the rest of 2016 will be much of the same, with a large bump up in December sales,” he said. “People who are tight with money all year still do Christmas, and if they’ve been tight, December is always extra good.”

Holiday Trends
   Varon said that he was done buying for holiday already and that most fashion jewelry was dead for him, with few exceptions. “Lightweight necklaces, delicate pieces, and lariat jewelry, or what we call ‘yoga jewelry,’ is selling,” he said. “A lot of women want it delicate and ultra thin.” He also noted that no one would be buying anything early this year. “I think people are afraid to spend because of the election,” he said.
   Buttars noted that he did not expect to buy for the holidays, as he was over-inventoried. “I’m in a unique situation this year,” he said. “I have way too much inventory. I had an inventory reduction sale, and I still have extra inventory.”

Article from the Rapaport Magazine - September 2016. To subscribe click here.

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