Rapaport Magazine

U.S. Retail

By Lara Ewen
Balance Sheets Getting Better

Although Valentine’s Day did not bring in many significant jewelry sales, according to retailers, stores still reported that February sales and traffic numbers were decent. In fact, 2015 got off to a healthy start across the country, despite record cold temperatures, newsworthy storms and lingering concerns about economic recovery. Explanations for the positive sales boost varied, but most theories centered around improved consumer confidence coupled with customers’ increased desire to have a more personal relationship with jewelers and jewelry. Overall, the outlook for 2015 continued to trend cautiously upward, and while no one was expecting prerecession figures, it seemed that the parsimony of years past was easing.

Positive Start
   The good news was that 2015 began with a strong uptick in sales, and retailers were pleased to see those numbers regardless of the reasons, which seemed elusive. “We had a nice increase in January, year on year, and we will definitely beat our 2014 February by quite a ways,” said Kathleen Sacco, director of retail and merchandise at O.C. Tanner, with three stores in Utah. “It just seems like the mood of our clients is happy, and people are more relaxed and they are making decisions more quickly and not laboring over them.”
   In Marietta, Ohio, Charla Hall, Baker & Baker Jewelers manager, felt that the increase in sales was due in part to consumers’ better understanding of quality versus price. “So far, 2015 is good,” she said. “We’re up year on year, and we started carrying Alex and Ani, so while the average price point went down, traffic was up. I think people are starting to spend money again, too. And they’re understanding that what they see on the internet isn’t always the best deal and that the independently owned stores have better-quality goods.”
   Increased traffic was also a boon for Keith Hurdle, owner of Hurdle’s Jewelry in Boulder, Colorado. “We had a good January, and we’re kicking butt for February,” he said. “People are coming in and spending, but it’s hard to know why. We did have some custom jobs that got delayed at the end of 2014, and that got kicked into 2015. But February is normally a good month for us.”
   Not all stores were reporting record numbers, but even stores that saw flat sales were feeling upbeat. “In January 2015, we had a decent amount of people looking, but sales were flat,” said Ryan Krasner, vice president and marketing director at Harold Stevens Jewelers in San Diego, California. “We were actually down a few points, year on year. But there were opportunities there, and the traffic numbers were there, so we’re hoping to improve. All our numbers say things are improving.”
   For Perry Sporn, owner of Perrywinkle’s, with one store in Vermont, three stores in upstate New York and one store in Montreal, it was important to take the long view. “The start of the year is always a little slow, but we don’t focus or worry about week to week,” he said. “It’s going to be a good year. Not as good as prior to the recession, but our balance sheets are getting better.”

Valentine Sales Small
   Whatever the reason for the positive results so far in 2015, it was not the mid-February holiday, according to retailers. “Valentine’s Day grows each year, but it’s still a flowers and chocolate holiday,” said Hurdle. “It’s not like Christmas, when guys are in by themselves picking something out.”
   According to Sacco, part of the problem is that fine jewelers don’t have much merchandise to fit a Valentine’s Day price point. “Valentine’s Day has just never been that important for us, although it remains consistent from year to year,” she said. “It’s a price point thing. It’s just not a large price point holiday.”

Trends to Watch
   The exponentially increased desire for custom product has become a big story in the industry, and will certainly continue to drive sales throughout 2015. “Pinterest is crazy,” said Hall. “Customers come to us with pictures from Pinterest and they’re noticing something, like a 1-millimeter difference in the shank of a ring band, and they want that level of custom product. And independents can do that, and stores such as Kay can’t compete for custom.”
   Krasner agreed that jewelry will be increasingly tailored to meet very specific and exacting demands. “Stores such as Kay and Ben Bridges will add an element of custom, but the independents are already doing that, in terms of creating a full custom piece from scratch,” he said. “From a jeweler’s perspective, we’re going to see even more customization. I think that the designs are going to continue to evolve and adapt to these personalized brides, which is an interesting thing.”

Article from the Rapaport Magazine - March 2015. To subscribe click here.

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