Jewelry retailers faced challenging times in 2017, despite a
strong stock market and a healthy economy. The ever-optimistic industry is
hopeful that holidays, which traditionally account for as much as 30% of the
annual take, will be healthy. But concerns still loom that there are bigger
challenges ahead. Diamonds are beginning to slip in popularity in some regions,
and traffic at traditional fine jewelry brick-and-mortars is down as younger
customers turn to online shopping or alternative engagement jewelry choices.
Still, the industry has ample opportunity to recover its luster, and may yet
snag those all-important December dollars, allowing it to squeak through the
end of
the year.
For stores across the country, 2017 has brought unexpected
challenges. “This year has been interesting,” said Richard Neustaedter,
owner of Neustaedter’s Fine Jewelers in St. Louis, Missouri. “It reminds me of
2008. It’s like someone just turned off the faucet. What in the world is going
on?”
Neustaedter, who changed locations earlier this year, said
traffic was down despite an extensive promotional effort to update his clients.
“I think people are shopping online because they’re concerned about what’s
going on in the world, even though the economy is getting better. Then the
people who do come in are just thrilled, but they’re not buying as much. Now it
seems like the only thing moving is custom pieces and repairs.”
In the Northwest, business has been solid, but the retail
environment has changed such that keeping a store open no longer feels tenable.
“This has been a better year than the last couple of years,
and business has been improving, but I just can’t do retail anymore,” said
Judith Arnell, owner of Judith Arnell Jewelers, which has one retail store in
Portland, Oregon, and a Chicago-area showroom. Arnell, who has been in business
for 45 years, said she was planning to shutter her street-level retail store in
Portland at the end of 2017 and transition to an appointment-only showroom
nearby.
“We’ll have private clients there, and people who are
qualified to buy,” she said, adding that the economy in her area was good, but
retail was getting more difficult. “There are rumors that even Nordstrom is
pulling out of downtown Portland.”
Nonetheless, retailers were hopeful about the upcoming
holidays.
“We’re optimistic about Christmas,” said Neustaedter. “We’re
doing a lot of things to connect with customers, like sending them $100 gift
cards, which is giving them something, rather than discounting. And we’re
constantly on the phone. It keeps people actively involved.... So I believe
that it’s all payoff at Christmas. But you can’t just sit back and not do
anything.”
Arnell, too, expects a strong Christmas, largely due to her
retail store closure sales. But she also pointed to a sea change in what her
customers were buying.
“I see a shift away from diamonds,” she said. “I had a
customer come in today and ask for a sapphire engagement ring, and it’s not
just sapphires. I’ve sold a few big emeralds, and a few big rubies. We just
don’t sell a lot of diamonds. In fact, I’m liquidating all my diamonds and
taking mostly color with me to the new space. In Portland, they do not want
diamonds.”
Arnell said she planned to shop for gemstones in earnest at
the upcoming Tucson show, and that she was still optimistic about the future of
jewelry retail despite the changes. “I love the industry,” she said. “It’s not
going anywhere anytime soon.”
Article from the Rapaport Magazine - November 2017. To subscribe click here.