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Jewelers not sold on Vegas

Reporting robust revenue despite high inflation and supply-chain issues, some retailers are skipping JCK, preferring to stock up elsewhere.

By Lara Ewen
Although the Las Vegas show season was back in its regular time slot, some store owners decided now was not the time to travel or shop. Retailers gave various reasons for staying away this year, but said they felt good about their current inventory levels — especially in lab-grown stones — and expected the strong sales they’d seen in the first half of 2022 to continue through the rest of the year.

Staying away

Some store owners simply didn’t feel the need to attend the Las Vegas shows this time around.

“We aren’t going this year, but we do plan to go next year,” said Amanda B. Coleman-Phelps, owner and president of Nelson Coleman Jewelers, which has one location in Maryland and another in Virginia. “We haven’t gone in the past eight years because of how successful our buying groups, the Retail Jewelers Organization (RJO) and Leading Jewelers Guild (LJG), have been for our purchasing, but we feel we are maybe missing out and plan to go every other year starting in 2023.”

In other cases, the Las Vegas shows don’t fit into retailers’ buying strategies. Scott Stambaugh, owner of Stambaugh Jewelers in Defiance, Ohio, explained that he was able to get what he needed elsewhere.

“I have only attended [JCK] once in the past,” he said. “I attend the Independent Jewelers Organization (IJO) shows, and I like the feel of the smaller show much better, and the vendors that I need are there.”

Going to Las Vegas is also expensive and time-consuming, remarked Eric Swanson, sales manager at Neustaedter’s Fine Jewelers in St. Louis, Missouri. He said his team used to go but would not be doing so this year.

“We don’t feel like we have any holes in the inventory. And [we have] a smaller store. We basically have to close the store for a week to go,” he explained. “I love walking around the shows and talking to people and getting new ideas. I’m a gem nerd. But it’s a matter of what we can afford.”

Grown goods going strong

All three retailers were seeing strong sales of lab-grown stones. For Coleman-Phelps, lab-created rounds in the 1.50- to 2-carat range were especially hot. But she was still cautious about investing in too much inventory.

“We plan to restock our fast sellers, but we are [otherwise] lying low with what we have as we continue to gauge the market and adjust our margins accordingly,” she remarked.

At Swanson’s store, “the percentage we sell of lab-grown diamonds to mined diamonds is probably 80/20,” he said. “Probably 40% of the under-40 crowd that walks through the door looking at engagement rings says they’re specifically interested in lab-grown diamonds. And we’re very actively promoting that on our website, and I’ve done a couple of local St. Louis news programs.”

Confident despite the challenges

Coleman-Phelps ran into some staffing challenges in 2021, when her store switched to managing its business using the Entrepreneurial Operating System (EOS), but she was able to find new salespeople using a recruiter. She has also been looking to expand, and said revenue was strong.

“So far, we’re up for the year about 10% at our Towson, Maryland, location and almost 75% in our Woodbridge, Virginia, location,” she reported. “We feel that bridal will be a bigger part of our business this year than it was last year, and we are focusing on events, since our clients want to get out more.”

Staffing was also a hurdle for Stambaugh. “We just lost a salesperson, and we are once again in the search mode for another staff member,” he said.

Financially, though, his business has kept seeing growth. “[It’s] not quite as much of an increase from [2021], but considering last year was such a good year, to still be growing is a great sign. Hopefully, [despite] the continued discussion of inflation and prices of things going up, we can continue to grow, but we are being cautious.”

Swanson attributed his good sales in part to some mom-and-pop stores near him having shut down; his store was able to accommodate their customers. Despite some annoying supply-chain issues, he was feeling confident.

“Even with the economy and the worldwide uncertainty, I don’t see that currently affecting our business,” he commented. “If the stock market crashes, or if there’s another real estate crash like 2008, then things will be different. But even with gas and food prices where they are right now, people are still spending money on the emotional connection that jewelry provides.”

By the numbers
  • US retail sales for April grew 0.9% from the previous month, compared with March’s 1.4% increase from February. Year on year, April sales were up 6%.

  • Ahead of Mother’s Day, US consumers were set to spend a record amount on jewelry for the holiday. Some 41% of shoppers planned to gift jewelry this year, up from 34% in 2021, for a total of $7 billion.

  • Swiss watch exports rose strongly in March, passing the CHF 2 billion ($2.09 billion) mark earlier in the year than ever before. Global shipments increased 12% year on year to CHF 2.09 billion ($2.19 billion) for the month, while supply to the US jumped 32% to CHF 337.6 million ($352.5 million).

  • US jewelry sales climbed 33% year on year during April, up from March’s 12% increase. The April jewelry figures were 52% higher than in the same period of 2019.

Sources: US Census Bureau, National Retail Federation (NRF), Federation of the Swiss Watch Industry, Mastercard SpendingPulse

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

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