RAPAPORT... It’s been a good year for many U.S. jewelers, most of whom expected to close it with a solid Christmas shopping season.
“The holiday season is keeping pace with how we’ve done all year,” said Peter Engel, president of Fred Meyer Jewelers and Littman Jewelers, which has more than 450 jewelry stores in 35 states. He said that traffic is good and that the industry’s Journey Diamond Jewelry campaign is doing “extremely” well.
“We anticipated it being good, but it’s been better than what we expected. Not only the small sizes are selling, but the bigger pieces are selling also. The average ticket price is higher,” he said. Shoppers are not hesitating to go to the $1,000 piece or the $500 piece.
Fred Meyer has also introduced yellow gold in the Journey pieces and is seeing “tremendous” activity in that area. “There is a call for yellow gold. I think, as an industry, maybe we abandoned it too much,” he said. White remains dominant, but yellow gold seems to do well with more mature customers, who are more willing to spend money.
Across the board, Engel reported consumers buying bigger and more expensive pieces, be it diamond watches, Journey pieces or bridal jewelry.
Elsewhere
At Simms II Jewelers, Winchester, Massachusetts, traffic was a little behind last year, but customers were buying higher-ticket items and more diamonds, according to owner Artie Bennos.
Bridal jewelry is selling well, as it traditionally does this time of year. Bennos said there seems to be more demand for engagement rings, as well as more upgrades, as couples exchange wedding ring sets or buy larger diamonds for their rings. Bennos has seen little response to the Journey campaign, but Circle of Love pieces are still selling.
Richard Holmes, owner and president of Duke’s Jewelers, Springville, Utah, about an hour outside of Salt Lake City, reported that traffic in his store is similar to last year. He thinks he’s doing a little better selling diamonds than he did last year.
Tim Powden, owner of McWayne Jewelers, Manchester Center, Vermont, said that traffic in his store has been good, but expected the “real onslaught” in the week immediately before Christmas. “Those last three or four days, you see the wild-eyed men coming in, saying ‘What can I get?’” he said.
Powden is selling fewer rings this year, but necklaces, earrings and bracelets are doing well. McWayne’s sells a lot of custom-designed jewelry. Generally, the store can mark these up more because customers can’t shop around on custom pieces.
“Our consumers are conscientious about quality and I think that we get a lot of business from people who know us to carry quality. They feel comfortable coming here because they know what they’re going to get is superior,” said Powden. Although he has stocked some Journey theme jewelry, no one has specifically asked for it.
Powden thinks that people seem to feel comfortable spending more money. “The economy is good, especially here right now. Our unemployment rate is 2 percent,” he said.
Powden has seen some awareness of the Journey campaign by customers, but little response. Although his store does highly targeted marketing — by buying commercials on cable television stations, according to zip codes — most of his business seems to come from referrals.
No Impact From Movie Yet
By mid-December, retailers were not seeing any impact from the “Blood Diamond” movie, which had been released about a week earlier. All had prepared for the release. Engel said that Fred Meyer prepared for the movie by working with the World Diamond Council (WDC) to make sure that all stores had an employee training manual about the movie and knew how to respond to questions about it.
“They all held a store meeting and we let them know just what we were doing as a company to ensure that our diamonds were conflict free,” said Engel. “We’ve been preparing for this for the past couple of years in making sure all our stones were conflict free.” Employees were well informed so they could comfortably respond to any customers who came in with questions, but few have.
Bennos, who is a member of Jewelers of America (JA) and makes sure that his diamond suppliers adhere to the Kimberley Process, said that he has had no customers ask about the movie. Holmes said he’s had just one customer ask about the movie and his staff simply explained what the industry has been doing to combat the problem.
Powden said that he has not heard anything from customers about “Blood Diamond,” although he and his employees have talked a lot about it so that they’re prepared in case a customer does ask about it.
The Marketplace
• Single carats are selling well.
• Many consumers are buying 1.50 to 2 carats.
• Round cuts are king.
• White settings are strong, but yellow gold is resurging.
• High-end watches with diamonds are popular.
• High-style earrings are moving well.
• Jewelers are getting the diamonds they want.
Article from the Rapaport Magazine - January 2007. To subscribe click here.