Rapaport Magazine
Markets & Pricing

Cautious optimism as consumers favor jewelry

Store owners fear further Covid-19 challenges, but surging sales signal a promising fourth quarter.

By Lara Ewen
This summer’s sales were hotter than they’ve been in years, retailers reported. Traditionally, jewelry store owners have bemoaned the seasonal slumps of July and August, but this year, despite the pandemic — or possibly because of it — customers continued to shop and spend. Still, as fall loomed, jewelers were uncertain about almost everything, including the potential impact of Covid-19 variants on in-person interactions, and what that might mean for holiday shopping plans.

A reason to be happy

Business was up for many stores in the first half of 2021.

“We’re doing really well,” said Catherine Angiel, whose eponymous boutique is in New York. “We’re working less and making more money. We’re doing better than we’ve done in decades.” She used some pandemic downtime to push more digital interaction with her customers, and it paid off. “We sent out e-blasts, and we got website sales, and we did virtual appointments. And I’m so grateful. I have 30 years of clients, and birthdays and anniversaries are coming up, and people wanted to feel happy about something. And jewelry is happy.”

Joseph R. Villarreal, president of WhiteFire Diamonds and Fine Jewelry in Austin, Texas, expressed optimism about sales in the upcoming months, but also caution due to the Covid-19 spikes that the Texas Department of State Health Services has reported.

“Thus far, I do not see any hint of a slowdown,” he said. “However, now that the Covid-19 variants are on the surge, sales may be affected.”

Villarreal was hopeful that his busy summer would translate into a profitable fourth quarter. “Summer sales have been above expectations. Our hope is to do at holidays at least what we did last year.”

Store owners attributed their sales numbers in part to well-heeled customers who were unable to splurge in more experiential ways.

“I don’t think the jewelry industry realized that our number-one competing industry is travel,” said Steve Samaras, president and owner of Zachary’s Jewelers in Annapolis, Maryland. “I hope we will have learned from last year. If this Covid-19 thing starts to blossom again, and the infection rate increases, people will be more concerned about travel and look for alternative ways to celebrate, and that will have a positive effect on us. I hate to think that, but I’m preparing for a very good holiday. Year to date, I don’t even want to tell you where we are, but it’s scary good.”

Changes to inventory

The combination of pandemic uncertainty and an increased client desire for custom work meant most stores were keeping their stock lean.

“Plans are to stock up on our own custom items,” said Villarreal. “However, we’ll keep inventory at a minimum.” He added that his customers were moving away from mined diamonds. “New clients are lab-diamond-buying clients. And they’re not all young buyers. They’re a mix of 60% younger and 40% older.”

Classic styles and bigger pieces were also doing well. “Traditional items are very popular,” said Samaras, adding that fancy shapes such as ovals, hearts and marquise seemed to be trending, too. “Studs, hoops, tennis bracelets. And everything is bigger, as far as engagement rings are concerned. If I had to guess, it’s the emotional aspect of what we sell. Our client base is upper middle-class, and they’ve been less affected by this, and they haven’t spent money elsewhere, so when they buy from us, it’s big. We sold a $60,000 tennis bracelet yesterday. And the younger clients we’re seeing are buying bigger. But watches are very slow.”

Scaling back for December

Rather than pushing hard for the holidays this year, Angiel is pulling back. “Instead of being open seven days, I’m open five, and I’m only open until 4:30 p.m.,” she explained. “And I’m not adding inventory for the holidays. I’ll make something specific, but I’ve been doing this for too long. There are peaks and valleys, and I’m personally being cautious. I’m also not planning on having any holiday events in the store because of the Delta variant.”

Customers have been understanding and enthusiastic, she added. “Consumer confidence is up, and they’re being extraordinarily supportive of small business. If you want something super special, you can’t get it at a big-box website. Anyway, we’re not a Christmas store. My summer is bigger than December, and Valentine’s Day isn’t nearly what it used to be. But now, with Covid-19, people are saying they want to treat themselves, because you never know.”

Article from the Rapaport Magazine - September 2021. To subscribe click here.

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Tags: Lara Ewen