Rapaport Magazine

U.S. Retail

By Lara Ewen
Slow Summer, but Upbeat Mood

Traditionally a slow season for retail jewelers, summer has become a time for many store owners to take stock, both literally and figuratively, and plan for the rest of the year. Most retailers were feeling positive about their sales, though traffic was somewhat slower than they’d hoped, and a few stores reported that single-item sales over $10,000 were also lagging. Nonetheless, with many buyers already stocking for the holidays, the overall mood was upbeat and most expected continued improvements throughout the year.

Midyear Assessments
   For most stores, the year so far has been good, if not great. “We’re having a better year in 2015 than 2014,” said Georgie Gleim, owner of Gleim the Jeweler, with two locations in California. “July is a little quiet for us, but then, there’s a major reconstruction project happening in the shopping center where one of our shops is located. June 2015 was better, year on year, and the economy is doing very well out here because of Silicon Valley. All the big firms are out here, such as Facebook and Google, and they’re hot. So in general, we’ll have a good year, and the redevelopment at the shopping center will benefit everyone because the construction will be done before the holiday.”
   Some retailers are pleased just to see stable sales and steady business. “I would say 2015 is consistent with 2014, sales-wise,” said Michael Oliva, co-owner of Mavilo Wholesalers, which operates a Tampa Bay, Florida, retail store as well as an online store and a wholesale operation. “Business is pretty much the same for us, but the same is good. Maybe even a little better. And bridal is our best business,” commented Oliva on the retail operation.
   Bridal was also important in the Midwest, though the changing demographic was causing a bit of a sales hiccup. “Business is steady and holding,” said Tyler Nogai, vice president of Arthur’s Jewelers in St. Paul, Minnesota. “We’re bridal-focused and we’re finding the average age of engagements is going up, so that slows things down a little. When you have a steady group of people coming in, and then the age changes, you have fewer engagements coming in. But when they do come, they’ll come in droves. So this year we’re holding steady. I don’t think bridal is going down, but the average purchase price has gone up. The economy is good, though, and the ones who do come in have money and they want designer.”

   One of the problems that store owners have noted is a traffic slowdown and a bit of a dip in high-end sales. “I think it might be even with 2014, or maybe even a little down,” said Richard Hegeman, owner of Hegeman & Co. in Providence, Rhode Island. “The internet is a factor. We’re seeing a few more tire-kickers in the store. We spend time with them and we educate them and then they go off to the internet. That’s a hard thing to stop. On the other hand, we provide a lot of service here by way of custom orders and appraisals and that’s fairly strong. But sales in the $8,000 to $10,000 range are down.”
   Other stores have seen a slowdown for an entirely different reason. “We tried something a little different this year and we did no advertising,” said Robert Tortoriello, sales manager at Bentley Diamond Importers in Wall Township, New Jersey. “We wanted to see what we’d sell. And so we’re a little down from 2014, but the reason is because of the ‘no advertising.’ We’re also getting a lot fewer Pandora clients. I feel like people are over it, but Pandora is trying to branch off into jewelry and they have their own stores. When I took Pandora, we doubled our store foot traffic and that traffic has gone. But normal jewelry traffic is the same and people are spending more money; they don’t worry like they did in 2009. They’re not afraid to buy now. You know, people got used to spending less money and then salespeople got used to showing lower-priced items because of that. But even with all this, I’m down 6 percent in transactions, but I’m up in profit because I’ve saved on all my advertising costs.”

The Overall Outlook
   None of the stores interviewed were concerned about the current economic plight in Greece having an affect on U.S. retail sales, unless the subsequent blowback from the crisis reaches beyond European shores. That said, everyone is keeping a watchful eye on the situation, just in case. “We’re mostly done with holiday buying at this point and while the rest of the year depends on the fall and what happens in Greece and Europe, I think it could be a good season,” said Nogai. “You know how investors are with their money and the market is on hold, watching how Greece is going to develop.”

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

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