Rapaport Magazine
Markets & Pricing

Eager shoppers fueling high hopes

Business is booming as the festive season rolls in, and retailers are cautiously optimistic that it will continue.

By Lara Ewen
As the US prepared for its second pandemic holiday season, jewelry retailers were hopeful that strong sales during the first three quarters of the year would continue into December. While there were some concerns about possible supply chain issues, especially for Rolex dealers, the store owners who had already nailed down their inventory needs were ready to wrap the year up in a box for both early shoppers and last-minute gifters.

The early crowd

Stewart Brandt, owner of H. Brandt Jewelers in Natick, Massachusetts, was cautiously upbeat about the upcoming holiday season.

“The year to this point has been off the charts,” he said. “It’s very good, but I’m not sure [about] the fourth quarter. I didn’t invest a lot of money in new inventory for the season, partially based on 32 years of gut feelings, and partly because I’ve got too much.”

Brandt said his customers weren’t ready to begin their holiday shopping in October anyway, because that’s not the nature of his client base. “The stores that are strong with clienteling and sending postcards and gift baskets, maybe, but that’s not my strength. I know my regulars will be in.”

In contrast, early holiday shopping was already in full swing for Larry Hall, owner of Baker & Baker Jewelers in Marietta, Ohio. “We have people buying stuff already, and people are already laying stuff away,” he said.

His year has been busier than usual, he added, in part because a lot of weddings were postponed from last year due to the pandemic. “I think people want to get their holiday shopping done early and not worry about it. There’s been more than a year of worry and a fear of the unknown, and that’s often a driving force. A lot of people want to get it done and kick back.”

He believes demand will increase closer to December. “There’s always a handful of people who start early, and then a bunch of people who delay.”

On the west coast, business was also busy in the lead-up to the holidays.

“The last 18 months have been crazy,” reported Russ Varon, co-owner of Morgan’s Jewelers in Torrance, California. “Sales are way up, and watches are extremely strong, along with diamond sales, especially in larger diamonds.”

However, Varon’s Rolex business has been challenging due to supply chain issues.

“Rolex supply and sales have been very frustrating,” he said. “[But] I’m trying to keep the customers happy.”

Yellow gold and colored gems

Trend-wise, Brandt has found custom to be big in 2021, and diamonds have performed well.

“I’m also seeing a return to yellow gold,” he said, “and I’m buying from the selling public. I’m doing restyling, taking apart old material and remaking it. We had so much work for my jeweler, we had to outsource.”

Hall’s fine-jewelry customers, meanwhile, were buying higher-priced basics. “We’re still selling some staple items like the $5,000 stud earrings. And I did get an order for yellow gold recently, so we’re seeing a tiny little upswing for yellow, mostly with older customers, because a lot of their friends have white gold, and they want to be different.”

Varon’s strong sales throughout 2021 have made him optimistic about the upcoming festive season. “I’m expecting a strong Christmas. I’m building a lot of new inventory, including [more] colored gemstones such as ruby, emerald and sapphire, and new fun colors in semiprecious stones.”

December predictions

Hall said his biggest challenge for the holiday season would be staffing. “The government was handing out unemployment and benefits, so no one wants to work. But it’s easy to let hate enter into the picture. You don’t want to let that divide you and your customers. So we just keep talking about romance.”

Brandt expects to compete with travel dollars this year, an issue he avoided last year because of pandemic restrictions.

“People are becoming a little more comfortable traveling, and they haven’t gone to Disney World for a few years,” he commented. “I never consider the other jewelry stores my competitors. I think of travel, iPhones, car dealers, the gun store.”

He has also been trying to develop a younger, newer clientele. “My age group isn’t buying jewelry. I’m buying more from them than they’re buying from me, because they’re downsizing. They’re moving into over-55 communities, and they don’t want more stuff. They’re trying to unstuff themselves.”

By the numbers
  • Overall retail and food sales for the US in September were up 0.7% from August and 13.9% year on year, adjusted for seasonal variation.

  • For the first nine months of 2021, US retail revenue was 14.5% higher than during the same period last year.

  • In September, indoor malls visits were down 6.5% from September 2019, while outdoor mall visits were down 5.2%.

  • Swiss watch exports to the US in August grew 20% compared with 2019, coming to CHF 212.6 million ($230 million).

  • US retail sales for the upcoming November-to-January holiday season will climb 7% to 9% year on year to between $1.28 trillion and $1.3 trillion, projections show.

Sources: US Census Bureau, National Retail Federation (NRF), Placer.ai, Federation of the Swiss Watch Industry, Deloitte

Article from the Rapaport Magazine - November 2021. To subscribe click here.

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Tags: Lara Ewen