RAPAPORT... Like the rest of the luxury market, most retail jewelry sectors have been struggling as of late. However, one bright spot seems to be the bridal business, which, despite seeing somewhat smaller sales, is still doing quite well, even in these tough times. Retailers don’t see this as likely to change, and stores that have made a business of banking heavily on bridal jewelry may well be among the best prepared to withstand the recession.
Trading Down to Smaller“Our bridal business has been a bright spot in this current economic downturn,” said Sean Dunn, vice president of J.R. Dunn Jewelers in Lighthouse Point, Florida. “The bridal customer traded down, but is still buying.” That said, Dunn notes that he’s selling mostly 2-carat stones these days, as opposed to the 3-carat and larger stones he used to sell.
According to Mac Ahmad, vice president of Bartikowsky Jewelers in Wilkes-Barre, Pennsylvania, one of the reasons bridal continues to deliver sales is because it’s often a planned purchase. “People still want to get married,” he said. “Most people set aside for that event. It’s planned, and sometimes it’s years in the making. So they have money for the ring.”
Across the country, bridal retailers are seeing customers who are cautious and more budget-conscious than they used to be. But that doesn’t mean they’re not going to spend something. “The recession has made people more price sensitive,” said Rick Velayo, manager of Gleim the Jeweler in Palo Alto, California. “People are still buying, but they are more cautious in terms of size and value. I pity the fellow who tries to say, ‘Honey, will you accept this engagement vacation and marry me?’”
In Brooklyn, New York, Tara Silberberg, co-owner of The Clay Pot, agrees that her customers are more reserved this year than they were in 2008, but also agrees that this isn’t preventing sales so much as it is lowering some of the numbers, and occasionally delaying the actual date of the purchase. “We’re seeing more hesitation,” she said. “I think people are having a harder time committing, and there’s just a longer lag between the committing and the purchasing. And we’re seeing a surge in the lower price points.”
Investments and NecessityMost retailers agree that one of bridal’s strengths is that it’s become a cultural imperative for any engaged couple to get at least some kind of ring. “With an anniversary gift, it’s different,” said Jay Feder, co-owner of Jay Feder Jewelers in Denver, Colorado. “The difference is necessity. If you get engaged, a ring is a necessity.” Feder also said he’s been advising some of his customers to remember that this ring purchase is an investment, too. “A diamond is a tangible thing,” he said. “It may be weaker these days, but it’s still tangible. And maybe it’s better to have your money in something tangible.”
In California, Velayo said that while some of his customers are shying away from deep purchases, others are seeing diamonds as a good way to hold on to their assets. “I had a client who purchased a necklace,” he related. “He said that he was tired of watching his portfolio shrink. He decided to convert to assets and, this way, his wife can enjoy her new asset.”
Classy, not Flashy
But even as bridal continues to set a steady pace in an otherwise lamentably slow retail season, there are changes. The biggest is that no one wants to seem flashy these days, even if money is not an issue. “ Gone are the days of conspicuous consumption,” said Dunn. “Clients are going to have to feel good about making a jewelry purchase. I think the questions like, ‘What brand is this?’ ‘How and where is it made?’ are going to become huge as consumers become more conscious. Jewelers who do the right thing and have clear answers will prosper.”
In addition to more customers being concerned about a diamond’s provenance, there’s also a sense among customers that wearing or buying something large or expensive would be rude in these tough times. “Some people are feeling guilty about being ostentatious,” said Feder. “The ostentatiousness is going away a little bit, and people are looking for something simpler, and going back to basics.”
According to Silberberg, the desire to not seem too flush is part of what’s keeping sales down, but as long as no one notices, customers are still shopping. “Even in gifts, people are buying and just hoping no one saw them doing it,” she said. “I think that people are going to want to be less splashy in what they buy.”
The Marketplace• Round shapes are the top sellers, though some bargain-conscious shoppers are snapping up other shapes, such as marquise, because of the price.
• Best-selling carat weight has dropped to an average of 0.75 carats.
• SI1 is the favorite clarity.
• The preferred color has dropped to H, with some customers even buying I and J.
• 18-karat and 14-karat white gold are outselling platinum.
• The average price for an engagement ring, including stone and setting, is $4,500.
Article from the Rapaport Magazine - April 2009. To subscribe click here.