As the year
drew to an end, retailers were busy preparing for the upcoming holidays. Even
though custom pieces and engagement jewelry continued to bolster sales,
competition from online-only stores, combined with consumer reluctance to
spend, meant that breaking even with 2016 sales was a struggle. Fortunately, if
December sales are good, it will be a bright Christmas for both consumers and
store owners.
Weathering the storms
The year has
turned out to be rockier than many retailers hoped, with reasons ranging from
politics to weather. In Houston, Texas, of course, Hurricane Harvey had a
significant impact.
“The year’s
actually been quite good, other than the flood,” said Jonathan Zadok, owner of
Zadok Jewelers in Houston. “The oil market has stabilized, and when [President
Donald] Trump won, people in upper income brackets felt a lot better spending
their money. That was good for the luxury world.”
Still, Harvey devastated the
city, and it took a long time to rebound. That hurt retailers at every level.
“A lot of
people were affected by the flood,” said Zadok. “We were closed for a week, and
after that, there was very little traffic; 85% of people didn’t have insurance,
and a lot of people had a lot more damage than insurance could cover. So
instead of spending thousands on jewelry, people are trying to help their
friends and family out.”
After the election
For other
stores, the year got better as it went along, despite a flagging consumer
confidence level. “The year started off slow, but over the past three months,
we picked up again,” said Joe Strong, co-owner of Waterfall Jewelers, which has
two locations in Michigan. “A lot had to do with the election. Consumer
confidence was down.... It started around the end of August in 2016, and didn’t
pick up again until this summer.”
Shoppers were
also avoiding some lines that had been popular in the past. “We’ve seen traffic
decrease significantly for Pandora and Alex and Ani,” said Strong. “Both of
them have definitely been down, but our mid-range sales, between $500 and
$1,000, have been up. We pride ourselves on being a fine jewelry store, so it’s
nice when people move away from the trinkets.”
A sour
political climate proved too tough for many consumers, and led to a sales slump
at Goodman’s Jewelers in Madison, Wisconsin. “Overall, 2017 was not as strong
as last year,” said company president John E. Hayes, commenting that politics
was a big factor in the downturn. “We’re down close to 20% through the end of
October versus last year. People are not comfortable not knowing whether or not
they’re going to have health insurance, and the economy isn’t as strong as DC says
it is.” That’s resulted in people being skittish about spending money, he
continued. “We have just as many tickets, but they’re just spending a lot
less,” he said. “Guys who used to spend $800 to $1,000 for their anniversaries
are spending $200. People have changed their buying habits.”
‘A better Christmas’
Fortunately,
store owners were feeling confident that Christmas would help fix a troubled
year. “If the holidays are anything like this fall, we’re expecting a better
Christmas than last year,” said Strong. “Christmas Eve is on a Sunday, so the
Saturday before might be our busiest day ever.”
Hayes agreed.
“I think the holiday will be much more positive than the rest of the year,” he
said. “It won’t make up for what we’ve lost, but this is definitely the point
where the teeter-totter starts to move in the other direction.”
Article from the Rapaport Magazine - December 2017. To subscribe click here.