Questions for the Rest of the Year

Personally, I'm not sorry to see that there will be less price-promotion advertising. Nothing against Whitehall or Friedman's personally, but that constant hammering of discounts and so-called "deals" on diamonds and jewelry is what has driven this industry's reputation down to that of a stereotypical plaid-jacketeded used-car dealer. As I've said before, we have too much sameness of merchandise in the chain sector, and while there's a customer for that product, and room in the market for either a national duopoly (i.e. Lowe's and Home Depot) or a single strong national and a series of strong regionals so that there are no more than two or three per market, there's not enough room for all the stores that were out there and we're seeing the results of that now.

MJB -- Excellent point ... if there is a silver lining here to all this bad news, it is that the companies that do stay in business will (in theory at least) get stronger. That seems to have happened somewhat the independents, at least according to the recent JA survey. So all this chaos is part of the natural business cycle, even if watching it up close, it's pretty ugly. The possible downside, however, is that there is less people out there promoting and spreading the word about jewelry, which we sorely need -- though, correct me if I'm wrong, neither Whall or Friedman's were big advertisers anyway, and tended to rely on price-based promotions. On your second point, I would assume (and, again, someone can correct me on this) that selling a customer list is perfectly legal. I know credit cards sell their databases all the time. It doesn't seem to have come up much in the bankruptices I've seen, however.

Something that just popped into my mind: Is it possible for another jewelry company to BUY Friedman's or Whitehall's customer list, legally? Any chain would love that information for their mailing lists, I am sure...but I doubt it's legal to sell it.

Just a thought, thinking of the defunct chains in terms of numbers: Friedman's was doing about 300 million+ dollars a year in sales. Whitehall was probably doing at least 200 million (yes, I am too lazy to look up National Jeweler's numbers or look at the company's reports). So that about HALF A BILLION DOLLARS of annual spending now up for grabs. With Friedman's/Crescent gone, and if Whitehall is out of commission by Christmas, then all of their former customers will shop somewhere else. Companies do need to play it somewhat careful at this time, but this is also a big opportunity to cash in on the big chunk of market share that has opened up.

Rob, I do not think you are being too negative. This is what a friend of mine calls a "market correction." The retail jewelry sector has been a large, bloated complacent industry...at least for the last 8 years. The Friedman's liquidation(which I was a part of) and now the Whitehall liquidation will have the effect of streamlining the industry. However, over 6000 people have become or will become unemployed. Sad news in a tough economic time. I personally believe this will be the worst holiday season since the 80's. It will be interesting to watch.