Strong for Luxury Jewelers, Moderate for Middle and Mass

High-end jewelers polled by JCK reported slight to significant increases in holiday sales for 2004, while sales gains for midlevel and mass-market stores were more modest overall—and a few declines were noted by jewelers in regions hard hit by job losses. Jewelers in all sectors also reported fewer customers but higher per-ticket sales.

In the luxury sector, most jewelers JCK spoke to claimed double-digit gains over last year's holiday sales, although the level of those increases varied from just over 10 percent to more than 30 percent. No single product category, beyond the ubiquitous round brilliant diamond stud earring, earned "best-seller" status, but designer and branded merchandise earned honorable mentions. From Rolex, which sold well at Rasmussen Jewelers in Racine, Wis., to John Hardy, which was among the strongest brands at Cornell's Jewelers in Rochester, N.Y., upscale consumers were tuned into brands this holiday season.

Among the many retailers citing Hearts On Fire as a brand on fire during the holiday was Bill Sustachek of Rasmussen Jewelers.

"We couldn't keep Hearts On Fire diamond stud earrings in stock," he said. One-carat studs were the most popular size.

Bill Farmer, Farmer's Jewelry, Lexington, Ky., said the diamond right-hand ring, which was a flop with his customers last year, appears to have caught on and was replacing the "past, present, and future" (three-stone) ring in customers' requests. "People are coming in now and asking for it by name."

Overall, luxury store sales trended toward fewer pieces of higher-priced merchandise (than last year), in a show of quality over quantity.

"We were up 21 percent in December, but we saw less traffic," said Linda Abell, Sarah Leonard Jewelry, Los Angeles. "My cases are still full of merchandise."

Color—notably mixes of it—emerged as another strong holiday trend among luxury jewelers. Both Abell and Deborah Wishon, of DEVA in Winston-Salem, N.C., reported that multicolor sapphire pieces sold well. Others noted that colored stones, such as peridot, lemon citrine, blue topaz, and various pink stones, came in strong, boosting sales with their lower price points. With the exception of Rasmussen, where sales started early and remained steady, most reported sales coming later in the season.

In the mass sector, sales gains were more modest. Dale Perelman, president of the 51-store King's Jewelry chain with doors in Pennsylvania, Ohio, West Virginia, and Maryland, described the 2004 holiday as "so-so." Sales were about even with 2003.

In King's case, the weather was a major culprit, forcing 12 stores in Ohio to close two days before Christmas, which, Perelman says, are typically the stores' biggest days. As a result, the chain's "last-minute" sales were lower than last year's.

Diamonds did well at King's, which also gave evidence of the "quality over quantity" mindset among consumers, as Perelman reported sales of some bigger-than-usual (over one carat, more than $5,000) stones.

The Signet Group, parent company of Sterling Inc., which comprises such stores as Kay Jewelers and Jared Galleria, had not released holiday sales results as of press time. CEO Terry Burman, however, in a television interview several weeks before, identified the firm's signature Leo-cut diamond, an exclusive brand to the firm, as a likely strong seller. Both the Kay and Jared divisions had increased their ad spend and were advertising very heavily for the season, pushing both the diamond right-hand ring and also pieces from the Speak Gold campaign collection, in conjunction with the World Gold Council. He later told JCK the Leo and gold fashion did, in fact, sell well, as predicted.

H. Marvin Beasley, chairman and CEO of Helzberg Diamonds, with more than 250 stores in 35 states, said, "Considering how hard we worked, [holiday sales results] were somewhat disappointing. Sales were at the lower end of our expectations. It wasn't a fantastic jewelry sales year, but we converted nicely and the bottom line looks healthy."

Sales also came late, he said—even later than last year. "What can you do about the male consumer? He buys late." The Internet, he said, factored into the store's sales figures—to some degree as a competitor but, more importantly, by generating additional sales. "We did very well with our Internet business for the [holiday] month." Bridal was the store's strongest category; diamond fashion its weakest.

Stores on the West Coast posted varied results, but not everyone saw green this Christmas. E.J. Wasserman, vice president of Zwilinger Jewelers in San Francisco said sales were about even with last year. Traffic was down, but in terms of dollars, sales stayed about the same—again giving credence to the "less is more" trend. Diamond studs were the most popular item, and the average price point was around $1,000, typical for the store.

Rick Rogoway, an owner of La Rog Jewelers in Portland, Ore., was happier about the holidays. "It went pretty good for us. I don't have the final results in yet but it looks like it will be pretty successful." The firm has two stores, one freestanding and one in a mall. Rogoway noted that traffic in the mall store seemed to be down a bit, but not significantly enough to affect sales. The traffic patterns in his stores echoed what seemed to be a general trend for the season—consumers were opting for more convenient ways to buy than malls, including freestanding and big-box brick-and-mortar stores, and online.

Diamond earrings were, as usual, his best seller, and three-stone rings also did well.

Farther north, in Seattle, Ilya Poleschuk, partner of European Creations, said, "The year was bad and the Christmas was lousy. The holiday never came. We only did 17 sales, probably 80 percent down [from last year]. We are custom jewelers and manufacturing ourselves; high-end quality and very reasonably priced, but business did not happen." The store has been in business for 23 years and in its current location for about 17 years.

"Generally, business in Seattle is very slow. It is my impression that East Side jewelers did tremendously better than in Seattle." Poleschuk said normally the store has a strong following, and people seek it out because of its manufacturing ability.

"In general the economy in the Pacific Northwest is probably one of the worst in the nation. It's a combination of everything." What did sell, he said, were multicolored South Sea pearls, average price $15,000 to $20,000, and "well above average" in quality; plus some diamonds.

Further south, in San Diego, things were brighter at Charles Koll Jewelers. Malcolm Koll said holiday sales were up 7 percent from last year, and sales for the year were up 21 percent.

Northeast, Mid-Atlantic, and South. "We did about as well as can be expected with the economy being the way it is," says Tersea LaBiche of LaBiche Jewelers in Meridian, Miss. She says her area has "lost a lot of manufacturing jobs. We are just looking for things to pick up. We didn't even sell a three-stone ring." Best sellers were mid-priced items, and she did a lot of remounts.

Scott Cusson of Brinsmaid Jewelers in New Canaan, Conn., called the holiday "a step in the right direction, much better than the last couple of years." Business came, he said, "very early and very late. There was no middle. We did some wonderful business before Thanksgiving and then we did some great business right before the holiday." He didn't do well with right-hand rings but sold many line bracelets and designer pieces.

"It was a good Christmas," says Bill Brundage, Brundage Jewelers, Louisville, Ky. "It wasn't poor, it wasn't static; we were just excited to see things get back to normal."

Louisville was inundated by a snowstorm right before Christmas. "Christmas Eve was not what I would have liked it to be," Brundage said. "It seemed like the snowstorm got rid of all our shoppers," though regular customers came through, he says. His store sold a lot of diamond jewelry, white gold tennis bracelets, and pearls.

"The month started off slow, but in the last week we did half the month [of sales]," said Joel Rzepko, of JMR Jewelers in Cooper City, Fla. He's not the only one with procrastinating customers, either—almost all Southern jewelers polled by JCK said the bulk of their holiday sales came in the week-to-10-days before Christmas.

Rzepko's store was also one of the few self-professed middle-market stores to post a 30 percent gain, among many that were posting same sales or small increases.

Michael White, owner, White's Jewelers, Springfield, Tenn., said sales were up 7 percent over last year, with his average ticket higher than last year as well. Diamonds and diamond jewelry were his best sellers. Anecdotally, he said he'd heard colleagues in his local area didn't do as well.

Diamond three-stone jewelry did well for Smith Jewelry in Brookhaven, Miss. Owner Terry Leary said sales for the period were "late, but good." He didn't offer any figures.

In Centreville, Va., B.K. Abdullah, president of Afendi Jewelers, called his holiday sales "all right, but nothing to write home about." He said they were even with last year, and, of course, late. Higher-end goods sold this year.

Midwest. The same patterns—strong luxury sales and more modest gains at midlevel—held true for Midwestern jewelers. Bob Gasser, owner of John Gasser & Son Jewelers, a downtown store in Canton, Ohio, says last year was good.

"We finished very well, on a high note. We're very pleased. We were ahead of last year's sales," said Gasser. "We had twelve successive months of increases, until August, September, and October, when we had a little bit of a slide. Then we peaked and had an excellent November and an excellent December. We were ahead for the year, but then we went well ahead in December." Watches, particularly Rolex, Breitling, and Baume & Mercier, were the best-selling items, along with the store's own brand.

"December sales were up double-digit from last year, so the season ended on a good note," says Tom Wright, president of Wright's Jewelers, Lincoln, Neb. "However due to earlier tough months, we'll break even, or be slightly up for the year." Diamonds were his best-selling item, with an average selling price in the $1,000-$2,000 range. Last year's average holiday selling price, by contrast, was in the $300-$500 range. "We did double-digit more business, but we did it, I feel, with possibly fewer customers."

"Sales were a little bit better than last year," says Rick Scroggins, owner of Scroggins Jewelers in Sheboygan, Wis. Sales in his store also peaked in the very last week of the season. "It seems like it's getting later and later—even more so than in the past." Best sellers were Italian modular link charm bracelets. "It's a small-ticket item, but we sold a lot of them. They are inexpensive: $18 a charm. But if you sell a couple thousand of them…that helps. Diamond earrings were big too. We sold a lot of diamond earrings in the $1,000 area."