Things are looking up for wealthier Americans.
Consumer sentiment is soaring on record-low unemployment, strong monthly job gains, and rising wages. Real estate prices are approaching prerecession levels, with U.S. residential home values adding half a trillion dollars in the final quarter of 2016 alone, according to the Federal Reserve.
But perhaps most noteworthy? The meteoric rise of the stock market. A 14 percent surge in the Dow Jones Industrial Average and similar increases in other major equities indexes over the four months following the November election helped boost U.S. household net worth by an estimated $3 trillion.
According to economists, the wealthiest 10 percent of those households own 80 percent of the stock market. And when stocks rise, giddy investors feel richer and get the shopping bug.
“The mood of the customer is pretty darn good,” says Ryan Michael, owner of Dacels Jewelers in Bellevue, Wash. “You see people’s eyes open wide when they look at what the market’s doing. It’s really starting to show.”
Patrick Murphy, owner and president of 104-year-old, three-store Murphy Jewelers in Pottsville, Pa., couldn’t agree more. “When you see your monthly statements, with the stock market taking off like this, we’re all feeling better,” he says. “There’s no doubt we’re looking at the good times.”
The Postelection Effect
Jewelers are describing today’s market as highly prosperous and sustainable. And they’re crediting the newly elected, pro-business Republican government, citing the president’s pledge to cut taxes, roll back regulations, and inject fiscal stimulus through heavy spending on domestic infrastructure.
“It’s going to be very good for business,” Murphy says. “I don’t always agree with his decisions, but I support the president and love my country. As a retailer, somebody in business, I feel he has the right model. People are enjoying life. They’re going after the better things. We’re really going to see some results in this coming year.”
According to Randall Cole, co-owner of Diamond Vault of Troy in Troy, Mich., the 2016 election marked a polarization of the American electorate. But the outcome proved positive for jewelers in their dealings with customers of either political persuasion.
“Politically, you’re seeing an erosion of the middle, with people moving either strong to the right or strong to the left. But both sides are spending,” Cole says. “You have all the independents and Republicans in the base who are energized. And then the Democrats are thinking, We better do it. He’s going to ruin the country anyway.”
Regardless of whether they voted blue or red, jewelers say sales began picking up steam just after the election. “We eclipsed our best Christmas,” says Charles Skibell, owner of Skibell Fine Jewelry in Dallas. “We started jumping for joy, wiping the sweat off after what started as a very tough 2016.”
Store traffic intensified, a trend that’s continued. “Yesterday was nonstop,” Cole says. “Today is more of the same.”
Price points are up sharply. “The value on the ticket has just jumped since November,” says Sarah Sockolof, co-owner of Simms Jewelers, located three miles up the road from Trump National Golf Club in Bedminster, N.J. “People started spending significant dollars on single purchases again.”
Multiple purchases are also becoming more common. “A lady yesterday purchased a $4,000 diamond ring just because it was unique, and then asked us to find her 4 carat studs,” Skibell says. “Another client came in last week looking for two watch batteries. I started showing her things, and she bought a string of beads. The next day she called about a ring. It was $5,500.”
Simms Jewelers is enjoying similar results. “I had a client call me about a Carlo Weingrill Tubogas bracelet she had bought years ago,” Sockolof says. “She wanted four more. These are five-strand bracelets that roll onto the wrist in 18 karat—$12,000 or $13,000 per bracelet. Until recently, that kind of thing had stopped.”
Jewelers are wasting no time in leveraging the situation. “We do an annual retreat to come up with our forecast and set the budget,” explains Murphy. “Major expenses like our purchasing, the advertising—all in the context of what we’re forecasting for our growth and expansion. And with the recent developments, we’ve budgeted up.”
And many retailers are budgeting up open-to-buys at the Vegas jewelry shows.
“My thinking is to turn some of the stuff and make room for things that are more exciting, buying more deeply into lines I like,” Sockolof says. “I’d like to pare down by 20 percent and use that money for nicer pieces. I want to be able to inspire the $100,000 sale with the $20,000 piece in the case, just make it bigger.”
In Westchester County, N.Y., which borders affluent Greenwich, Conn., Jonathan Landsberg, co-owner of Landsberg Jewelers in Rye Brook, N.Y., wants to add new lines that have a wow factor: “I’ll be in Vegas for JCK, LUXURY, and Couture. I’m looking for three new designer lines that are going to shake things up,” he says. “I can’t tell you what, ’cause I don’t know. But it’s out there somewhere.”
1. Saxon two-inch chain link hoop earrings; $3,450; waltersfaith.com
2. Anna II dome ring in 18k yellow gold with sapphires and diamonds; $2,650; alexsepkus.com
3. Rainbow Needle Drop ear jacket in 14k yellow gold with rubies, emeralds, and multicolor sapphires; $805 (sold singly); sydneyevan.com
4. Lunaria ring hand-engraved in 18k yellow gold with white mother-of-pearl; $1,680; marcobicego.com
5. When Spring Came ring in 18k rose gold with sapphires and diamonds; price on request; ferrarifirenze.com
6. Constellation ring in 18k gold with 0.66 ct. gray diamond slice and 0.34 ct. t.w. diamonds; $3,934; kaalidesigns.com