The 4Cs are not the only things that make a piece of diamond jewelry a sales winner. In an ongoing series, RDR explores the “3Ws” — what’s selling, what’s not and why — by going straight to the people who really know — jewelry retailers. Each month we ask a sampling of retailers to comment on the important issues that are facing the industry today.
Here is what they had to say this month when asked: What’s the mood of the consumer and what are they buying — or not?
BRIAN LAUER, OWNER/PRESIDENT
STOUT & LAUER JEWELERS
SPRINGFIELD, ILLINOIS
“I think people shopped strong and hard in December because they probably had been laying off for a couple of years, but we saw a lot of that go onto credit cards. So I think that’s having a backlash in this part of the country. People shopped in December because they had to and now there’s no pressing need for them to be out shopping. And that’s what we’re experiencing right now.
“The overall temperature of the climate is still kind of a wait-and-see attitude. I think the jewelry business as a whole is taking a turn and recreating itself from both the vendor’s standpoint and from retailing. It used to be retailers were chasing vendors all over the place and now it seems to be the other way around. So I think that things have changed a little bit.
“I think the overall feeling is anticipation, not knowing what it’s going to be six months from now. It used to be, 15 years ago or so, you went out and spent money and filled your cases in the spring and the summer and the fall, knowing that you were going to do business so it didn’t matter. And now everybody’s a little more focused on turnover and on cash flow because vendors are hurting for cash, too. A lot of retailers are probably cutting back on some of the purchasing.”
GARY YOUNGBERG, CO-OWNER
AMES SILVERSMITHING
AMES, IOWA
“We had a record year last year and we anticipate things will continue on and I guess I attribute that to the groundwork we’ve done for the past 30 years in developing ourselves as our brand — we don’t carry branded diamonds; in my opinion, they’re a waste of money. We’ve built a nice client base here and we’re always reaching out for new clients as well. We handle a different product than a lot of stores do because we have five people who sit at the bench and make jewelry all day long and we’re always crafting new pieces that no one else has anywhere in the world.
“I would say the engagement ring business for us has been very strong. We’ve been able to compete effectively against the internet by educating our customers. We don’t just buy and sell the paper; we’re buying and selling the diamond. And when you show people a center black inclusion that’s an SI1 versus a side white inclusion, they understand why there’s a 10 percent difference in price. Bridal is certainly key to our business and it continues to do well for us.”
ADAM GORMAN, OWNER
I. GORMAN JEWELERS
WASHINGTON, D.C.
“I think the mood is a bit hesitant. But we’re finding that the sales are there. We’re still doing well. Business isn’t necessarily growing by leaps and bounds, but it’s steady. And it’s not taking a downturn. Engagement business has been strong, loose diamonds, engagement mountings; bridal business has been excellent. I’d say, if anything, bridal business has been steady to growing. We did a somewhat soft Christmas; it wasn’t bad, it was just not necessarily a boomer, a huge Christmas. But Valentine’s Day was fairly strong and our customers are still responding and we’ve actually had a decent month.”
HARTON WOLF, DIRECTOR OF OPERATIONS
HENNE JEWELERS
PITTSBURGh, PENNSYLVANIA
“I think that the mood is in neutral; kind of one foot in the tub of hot water and one foot in the tub of cold water. We see customers coming in and the higher-end, luxury-end products are selling. We are finding that the lower-price-point items — under $5,000 — are not moving as quickly as they were in the past. I think the overall economy is being affected by severe increases in prices and it’s taking a real bite out of the basics. If someone used to fill up a car for $20, it’s now costing $35 or $40; heating homes has gone up another $150 a month. I think the people who have moderate to medium incomes are being impacted by this. So we’re still doing business, but I think people are being more selective in what they’re getting.
“I’m not so sure that there’s anybody taking business away from this segment, although retail electronics did siphon some money out of the jewelry sector. I think that’s what we’re looking at. We’re luxury and some of the people who used to have extra money now don’t.”
BILL FARMER, JR., PARTNER
FARMER’S JEWELRY
LEXINGTON, KENTUCKY
“I think it’s guarded negativism. I think there are people who are very wary in the marketplace, both on the buying and the selling end. You can attribute it to several things, including the fact that we are at war, natural gas prices are high, the price of the metals that we use in our industry has risen dramatically. In certain sizes, you run into situations where you have to make the extra call or two to find whatever the recipe is that that client is looking for. And we’re still running up against the problem that we have to charge a 6 percent sales tax in our marketplace and that makes a difference to somebody who’s shopping in other or, especially, online capacities.
“Yet we were ahead of last year, we were ahead for January and have done real well for February. But I think that’s the guarded part of it. We’ve had some nice sales, but by the same token we have a new Fed chairman, we’ve had interest rate hikes and at some point that begins to affect not just what the institutional borrower, but the individual borrower, is doing. Credit card minimums are going up and that has to have made a difference. People don’t have the same amount set aside or a lot of folks want to make sure they have enough set aside.
“It’s a very deliberate consumer, now. I’ve noticed a rise in the amount of special-order or custom or specifically made or altered orders. There’s a feeling ‘If I’m going to spend this money, I want to get exactly what I want. I want you to make it this way for me.’ And sometimes that includes nice diamonds. And sometimes it doesn’t; it’s just solely a remount with an add-on possibility.
“There are more trade-up situations going on now. People are taking more advantage of that, especially if they have created a sustaining relationship with a specific jeweler. I know we’ve seen a step up in that trade as far as ‘we have a pair that’s a carat; we want a pair that’s 2 carats.’ It’s like a busy restaurant after the holidays when everybody’s cashing in their gift cards. That happens with diamonds, too. They get enough money to get them to something bigger and they want you to help them get there.”
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