RAPAPORT... In the U.S. marketplace, JCK Las Vegas and the exhibitions surrounding it — Luxury, Couture and Premiere collectively — represent one of the major trade events of the year. But this time around, a troubled economy, rising gas prices and the uncertainly of an election year took their toll. Many retailers, especially those on the East Coast, chose not to attend the shows, or to scale back on the number of people they brought. Those who did go spent less than in previous years, buying into fewer new vendors and adhering more closely to their budgets.
Sticking to Budget ConstraintsLeslie Crothers, an American Gem Society (AGS) certified gemologist and buyer for Butterfield Jewelers in Albuquerque, New Mexico, said, “We go to JCK every year. I actually attended the very first show.” However, this year she made an extra effort to stay within her budget. “We spent what we planned to spend, but it was less than what we have spent in the past, due to the price of gold and the economy.”
For Ryann Rinker, director of merchandising at Tivol, which has two locations — in Kansas City, Missouri, and Overland Park, Kansas — the story was the same. He attended Luxury, Premier, Couture and JCK, and while he said he did very well at the shows, he also said, “We remained within the budget we had set before departing.”
Concerns about the economy left some retailers questioning whether to attend the shows at all. “I almost didn’t go [to JCK this year], because I started listening to all the press about the current economic situation,” said Rick Beaulieu, president of Springer’s Jewelers, with three stores in Maine. “Even though I did end up going, I cut back and only took two people, instead of four.” Once at the shows, however, Beaulieu found products he needed and even ended up going a little over his budget. “We probably spent more than we planned to, because we didn’t want to spend anything,” he said. “But we filled some holes that we needed to fill.”
Overspending Less
Even retailers who have been doing well in the tighter economy are playing it more conservatively this year. Bruce Yamron, owner of Yamron Jewelers, with two stores in Naples, Florida, said, “We wanted to be careful because the economy is showing a slowdown, and just because we did well this year doesn’t mean that we shouldn’t be careful with the new lines we’re bringing in. So we’re a little more selective. This year, we’re bringing in three or four new vendors instead of six to eight.” Even with a smaller number of new vendors, however, it was difficult to stay within his budget. “We always spend more than we plan to,” he said. “We get excited. This year, we were a little more careful. We usually spend a lot more, and this year we only spent a little more.”
One reason for overspending at the shows is the thrill of discovering excellent prices on much-needed items. That’s what happened to John Profit, general manager, diamond buyer and LLC partner at E.E. Robbins, which has three stores in Washington state. Profit, who attended the shows with his co-diamond buyer Brant Kane, said, “Brant and I spent a little more than we were going to because we found some bargains we did not want to pass on.”
No More Large Buys This YearOverall, retailers reported that they were able to find what they were looking for and that the rest of their annual buying would center on filling specific customer demands. Yamron, who was on the lookout for “something the luxury consumer in Naples will appreciate,” ended up making a large purchase in unique cufflinks. He now feels he’s pretty much finished with shopping. He said, “I’ll take one trip into New York, but our store is done with buying after Basel and Vegas.”
Springer’s Beaulieu, who was primarily looking for “price points, stronger marketing from vendors, and strong partnerships with people,” said, “I think [after our Vegas buying] we’re in a good position. We’ll be refilling quick-sellers, but our core inventory is in good shape.”
Ultimately, though, attending the shows isn’t only about stocking inventory. It’s also about taking the pulse of the market, and trying to discern its next move. Said Profit, “For Brant and me, the trip answered a lot of questions about the future and how we are going to buy diamonds. The diamond world is changing dramatically and the whole point in going to JCK was to see if everyone was telling the same story, or whether there was anyone there who would be willing to play by the old rules. We realize now that we will change our method of buying a large amount four times a year and, instead, buy more often and spend less, constantly filling in holes as they occur.”
The Marketplace• Round cuts lead engagement sales, with cushion and princess cuts tied at second
and emerald cuts gaining ground.
• The best-selling carat weight is 1 carat,
the most popular colors are F, then G, and VS2 is the top clarity, followed by SI1.
• Customers are asking for platinum settings again. The metal has climbed back into the top spot, followed closely by white gold, with yellow gold and palladium coming in tied at a distant third.
• $5,000 is the average price for an engagement ring, including stone and setting.
Article from the Rapaport Magazine - July 2008. To subscribe click here.