Turns out 2009 wasn’t as bad as it could have been. Now, while that’s not exactly the best possible news, it certainly beats the expectations of many retailers coming out of 2008. The stores that have managed to stay flat, or even gain a few percentage points, are feeling practically giddy just to still be in the game. As 2010 begins, hopes are high that things will at least not get any worse. And after the past 16 months, that is what’s passing for optimism.
Game ChangersOut West, Gail Friedman, owner of Sarah Leonard Fine Jewelers in Los Angeles, is finding it hard to predict how her holiday numbers will turn out. “If I think back on the past several years, Christmas just comes later and later,” she said in mid-December. “So we’ve been busy, but not like we usually are during the holidays. I’m still waiting for the rush. I think we’re still going to have Christmas, but less so than last year. In 2008, even though the brakes went on in October, we finished ahead because we’d had such an amazing year up until then. In 2009, I don’t think we’ll be down, but if I had to guess, I think we’ll be flat.”
Some retailers saw the end of 2009 bringing in better returns than 2008. Gary Gordon, of Samuel Gordon Jewelers in Oklahoma City, feels very good about his sales. “We’re ahead of 2008 numbers, year on year,” he said. “We’re ahead in traffic count, number of transactions done and average sale. People weren’t excited about spending money for Christmas presents in 2008. But this year, people have hope that things will get a little better.”
Down South, sales are quite strong. “We are very excited with our sales for this holiday season,” said Maria Reilly, manager of H & H Jewels in Coconut Grove, Florida. “People are shopping again, and aren’t afraid to be seen spending money. To date, our sales are up and we are seeing a continuing trend of increased sales for the season.”
Stores that have seen increased sales are crediting some of that to increased marketing and a harder push during tough times. “Overall, the holiday season has gone well,” said Steve Tapper, vice president of Tapper’s, with seven stores in Michigan. “We’ve been aggressive in our advertising, and it’s paying off. According to our numbers, we are pacing at just about 5 percent to 6 percent above 2008 in sales.”
On the East Coast, things haven’t been extravagantly ahead, but they haven’t been terrible, either. “So far we’re down from 2008, but we will make it up in the end,” said Evans P. Siskel, co-owner of DVVS Fine Jewelry in New York City. “Many long-time clients have made requests, for which we did not take deposits. As for other purchases, we think it will turn out to be at least equal to 2008 but not much better. We believe that even in New York City, where things aren’t as bad as other parts of the country, folks are finally listening to advice on saving and spending less. And, of course, we’ve seen unemployment rise here as well.”
Looking Ahead to 2010“Overall, we feel that our sales will continue to increase over 2008,” said Reilly. “The gloom and doom with the media in 2008 and 2009 hurt the industry. In 2008, luxury clients were able to spend, but they felt like they shouldn’t. They also felt like they did not need another watch or piece of jewelry. But the luxury client is shopping again.”
Siskel is also seeing some increased spending. “We think next year will be trim again, but we are already seeing upward swings in two ends of the jewelry spectrum,” he said. “People are buying extreme classics or they’re buying high-end designer pieces. To us, this reflects how various groups are reacting to the economy.”
According to Gordon, 2010 sales are likely to be brisk. “In 2010, I see a general improvement in the overall economy, with even more weddings,” he said. “And people held off on fashion merchandise this past year, so I expect that they will buy that kind of jewelry merchandise in 2010 because they didn’t do it in 2009 so much.”
Friedman is more cautious in her expectations. “I think sales will be flat for 2010,” she said. “I think it will be calm. It’s going to take a lot for our customers to get over the recession.”
Tapper sums it all up with a mix of optimism and a dose of reality. “I think 2010 has the potential to be good, maybe better than 2009,” he said. “But this is a time of survival. This past year was better than 2008, but it’s been a challenge.”
The Marketplace
- Round is the top-selling shape, though bargain fancy shapes such as emerald cuts are moving, too.
- 1.5 carats is the best-selling weight.
- SI1 is the most-purchased clarity.
- G/H is the top-selling color range.
- In settings, 18-karat white gold is currently selling neck and neck with platinum.
- The average price for an engagement ring, including stone and setting, is $8,500.
Article from the Rapaport Magazine - January 2010. To subscribe click here.