Rapaport Magazine
Markets & Pricing

Jewelers hope the good times last

After the pandemic ushered in a strong 24 months for many store owners, the trend appears to be continuing in 2022.

By Lara Ewen
Even as mask mandates and other pandemic restrictions began to ease across much of the country, Covid-19’s impact on the jewelry industry lingered. Retailers reported strong sales for the first quarter of 2022, saying they hoped the trend would continue for the rest of the year. Bridal and fashion were both robust, while impulse buying and women’s self-purchasing were noteworthy as well.

Still, some worried that the good times might not last, and planned to keep inventory tight so as not to end up with more goods than they could sell, should the market shift.

Starting the year strong

For Ken Leung, founder of Ken & Dana Design in New York, the pandemic produced significant year-on-year increases, which appeared to be continuing into 2022.

Last year “was 40% up from 2020,” he said. “And so far, year to date in 2022, we’re again up over 30% compared to 2021.”

Retailers across the country agreed that Covid-19 had brought in a remarkable sales boost. For some stores, sales were the strongest they’d ever been.

“Every store that hasn’t had their best two years, there’s something wrong with that store,” said Mike Lordo, president of Lordo’s Diamonds in Ladue, Missouri. “In 2021, we were up 40% over 2020. And at this point, it’s more sales than traffic. We’ve always had good traffic, but now the sales are higher.”

Stuart Benjamin, too, affirmed this trend. “Last year was our best year ever,” said the owner of Stuart Benjamin Jewelry Designs in San Diego, California. “It was for a lot of people. And our traffic is still up. We’re above what we wanted our numbers to be.”

What’s selling now

Leung, whose store specializes in bridal, said unusual designs were on trend right now. “Personalization remains very important for our clients. Fancy shapes are hot. Ovals have been killing it for the last two years, and now we are seeing pears, marquises, radiants and long cushions making a resurgence.”

Yet due to his business model, he doesn’t need to overthink his inventory, he pointed out, since “everything we do is made to order.”

In Lordo’s case, memo was more practical than maintaining a large inventory. “We’re buying diamonds, but not as much as we used to. We found out that memo might be the best way to go. I can get diamonds in a day or two.”

His engagement customers have been asking for “everything: marquise, pears, ovals, radiants and cushions.” Stud earrings and fashion pieces have been popular, he added. “Color has also done well, and there’s more impulse buying. Women’s self-purchases are up, too.”

Color was also strong for Benjamin. “Ruby and sapphire and stuff like that are selling,” he reported. “People are looking for unique things, and custom is doing very, very well. And a lot of people want marquise and pear shapes.”

While his older customers were happy to buy in-stock pieces out of his case, younger customers wanted more custom work. “The younger people bring in all these ideas on their phone, things they see on Etsy and Instagram,” he said, noting that most women’s self-purchasing also came directly out of the case.

Men’s self-purchasing, though, was almost nonexistent, he remarked. “I should carry more men’s product. I want to put more of the emphasis on some men’s jewelry. That’s one of my projects for this year, because nobody caters to them.”

Spending steady and high

On average, Leung’s customers spend about $5,000 per purchase, and that number hasn’t changed much since the beginning of 2021. “That’s about 10% more, compared to pre-Covid-19,” he commented.

Benjamin said his average wedding sale was between $5,000 and $10,000. For the second quarter of 2022, he plans to redo his engagement offerings.

“We’re bringing in an engagement-ring line called Sylvie, which is generated for the younger customer,” he elaborated. “Because they still come in for bridal, but they’re not buying our wedding bands.”

Of course, even as retailers raked in sales, some worried the bubble would burst.

“I’m optimistic that this will keep up,” said Lordo, adding that the average customer purchase right now was around $6,000 to $7,000. “Last year was by far the best year in my store’s history. But I have reservations. It may shift, and I hope it doesn’t. I’ve been in the industry 40 years, and I’ve never seen it like this.”

By the numbers

• US retail revenue for January was 3.8% higher than the previous month — compared with a 2.5% increase in December 2021 — and up 13% year on year.

• In January, Swiss watch exports to the American market jumped 38% year on year to CHF 252.3 million ($274 million).

• US jewelry sales rose 22% year on year in February and were 24% higher than in the same period of 2019.

• US President Joe Biden has issued an executive order prohibiting the import of “nonindustrial” diamonds originating in Russia, due to the war in Ukraine. Russian miner Alrosa supplies around 30% of global rough supply by volume.

• Revenue from De Beers’ February sales cycle — its second in 2022 — jumped 18% year on year to $650 million, compared with $550 million a year earlier.

Sources: US Census Bureau, Federation of the Swiss Watch Industry, Mastercard SpendingPulse, WhiteHouse.gov, De Beers

Article from the Rapaport Magazine - April 2022. To subscribe click here.

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Tags: Lara Ewen