Vegas Buyers Club



On your way to JCK? If you’re like your fellow retailers, you made your shopping list weeks, if not months, ago. JCK asked jewelers what they’re ­searching for ­(yellow gold, opals) and what’s ­driving sales (­consumer ­confidence: up, debt: down) in 2014.

THE TRENDS
What’s on retailers’ wish lists at jewelry market week

By Kristin Young

As buyers set out for jewelry week in Las Vegas, they are moving headlong toward the future while keeping an eye on the past. They will touch upon edgy, oversized, and angular pieces, but they have no plans to abandon the classics that their customers associate with value and longevity. Pieces with stories to tell are also high on priority lists. Getting the right mix of goods, they say, comes down to knowing your customer. Here, we highlight a number of items on retailers’ to-buy lists:

Platinum drop earrings with 11.35 cts. t.w. pear-shape sapphires, marquise-cut diamonds, and micro-pavé diamonds; price on request; JB Star, NYC; 212-308-3490; jbstar.com

Colored Gems (Brights to Cool)
As buyers anticipate interest in statement pieces for the 2014 holiday selling period, they’re on the lookout for bigger and brighter colored gemstones—particularly emeralds. The demand for color seems to be up in states like Texas, but has yet to hit traditional markets in Louisiana and Mississippi, according to Kelly Lopresto, assistant merchandising manager at Lee Michaels Fine Jewelry, with eight stores in the region. In Texas, ­consumers are responding to the big three—sapphires, rubies, and emeralds. “We always make sure we have those pieces for the fourth quarter,” she says. Cooler colors like blues and greens are hot tickets at Johannes Hunter ­Jewelers in Colorado Springs, Colo. “I think the cooler colors—tanzanite, ­sapphire—rather than the warm colors are always strong,” says president Linda Hunter. At JCK, Hunter plans to seek out vendors Marcel Roelofs, A. Jaffe, and Mark Schneider, among others.

Navitimer 01 (46 mm) with steel case and Barenia leather strap; $8,215; Breitling, Wilton, Conn.; 877-BREITLING; breitling.com

Oversized Swiss Watches
Robert C. Wesley, owner of Robert C. Wesley Jewelers in Scottsdale, Ariz., has a vast watch collection that sits alongside bridal and fashion brands such as Kwiat and Marco Bicego, but it’s Swiss watches that make his store a destination, he says. These days, size matters: Following the oversized trend in fashion watches from the likes of Michael Kors, women have been swapping their 26 mm bezels for 31 mm sizes and larger. “There’s a whole new market of people based on the size of the watches,” Wesley says. Customers are spending $10,000–$20,000 for classic models and between $40,000 and $75,000 for 18k gold versions.

Rose-cut starburst necklace; $950; Majolie Collections, Los Angeles; 213-489-1000; majoliecollections.com

Layering/Statement Necklaces
Stacked chokers and collars, multiple layers of pearls and short necklaces—anything that enhances the collarbone—are definitely on buyers’ minds. “People are really looking for innovative ways to wear jewelry,” says Charm & Chain founder and CEO Ali Galgano. Color is stronger than ever, she says, adding that “people are gravitating to really bright, in-your-face hues.” Even small necklaces can be worn in a bold manner—pendants piled on top of one another, integrating varied shapes and materials, make an impression. Yaf Boye-Flaegel, owner of Yaf Sparkle, is headed to JCK with the layering trend in mind—that is, delicate chains that can be paired with diamond or gemstone-encrusted necklaces. “Layering expresses individuality and takes you on a trip—‘Where’s that from?’?” says Boye-Flaegel. “I think people really like to collect jewelry based on their story and why they are wearing it.”

Bastet Necklace in 14k white gold with 0.65 ct. t.w. diamonds; $2,095; Coronet Diamonds, Los Angeles; 213-213-2089; coronetdiamonds.com

Natural Diamonds
John Carter, owner of Jack Lewis Jewelers in Bloomington, Ill., is not above scouring scrap heaps to, as he puts it, “rescue” diamonds—particularly natural stones with a story to tell. “I sold two natural pinks, a faint light pink, and a 38-point fancy purplish pink that looked like a little plum,” he says. Carter likens rescuing diamonds to picking pumpkins—something he did as a kid: Once, for a school ­pumpkin-carving contest, he bought a skinny squash pumpkin, laid it flat, and painted ears on it. (The squash won first place.) That’s the feeling Carter gets with imperfect stones. “I bought a stone—it was pear-shaped and it was brownish with a faint hint of pink to it,” he says. “I had it for six months. We ended up ­customizing a mounting and it sold within two weeks. I really do see myself rescuing these diamonds. Technically, this is just a low-colored diamond. But it has a story and we have a lot of fun with that.” At JCK, he plans to swing by Mark Schneider, SOHO the Art of Enamel, Gabriel & Co., and Metalsmiths Sterling

3.4 ct. t.w. natural yellow slice diamond ring and natural yellow and white diamond accent ring in 18k gold; $7,500; VIVAAN, 212-302-3130; vivaan.us

Midi Rings
Midi rings are everywhere this spring—a trend many fine jewelry retailers say is spilling into their businesses. “A lot of trends start in fashion and end up in fine,” says Twist co-owner Paul Schneider, who names midi rings as strong sellers online and at his Portland, Ore., brick-and-mortar outpost. “This one is definitely in fine,” he ­emphasizes. Customers have been very receptive to stacking midi rings, complementing traditional styles or standing alone. “[Wearing] a lot of midi rings takes normal to the next level,” says Yaf ­Sparkle’s Boye-Flaegel. “Many times, we sell a gemstone ring and add that small yellow or white [midi] ring or one with a tiny diamond on top of the knuckle, and it changes the look completely.” (For more on the mid-finger trend, see “10 Midi Rings You’ll Love.”)

Geometric Pieces
Perhaps not considered core product, linear styles or ­pyramid, triangle, and sphere shapes are nonetheless on retailers’ to-buy lists. (See JCK February 2014, “Geometry Jewelry Class.”) Melissa Geiser, fine jewelry buyer at ­Stanley Korshak in Dallas, touches on geometric to give a sense that they are a fashion house. The store carries such items as double pentagon earrings from Melanie Auld, an ombré fossilized walrus necklace by Monique Péan, and a white diamond triangle ring by Kismet by Milka. “Everybody should have a touch of it,” she says of geometric jewels. “But everybody should also think about their own clientele and ask themselves if their clients will wear it. Always consider your customer.”

Necklace with 38.3 ct. opal, 9.79 ct. spessartite, and 3.18 cts. t.w. diamonds; price on request; Spark Creations, NYC; 212-575-8385; sparkcreations.com

Opals
Once associated with bad luck and death—thanks, in part, to the evil traits Sir Walter Scott ascribed to the gemstone in the 1829 novel Anne of Geierstein—the ­rainbow-colored opal has shed the old wives’ tales and superstitions and is enjoying a major comeback. Opals are “huge,” says Twist’s Schneider. “It’s two stones now—emeralds and opals.” He’s not the only retailer on the hunt for October’s ­birthstone. “At JCK, we’re always looking for opal,” echoes Lee Michaels’ Lopresto, adding that the stone ranks among her top three stones alongside sapphires and rubies. “Opal is very popular and we’re always on the lookout for nice pretty pieces.”

1-inch hoops in 18k white gold with 6.15 cts. t.w. diamonds; $22,000; Gumuchian, NYC; 212-593-9888; gumuchian.com

Classic Diamond Hoops/Studs
Smart retailers will be stocking up on styles that have plenty of crossover appeal—that is, jewels that are appropriate with jeans, at the office, or evenings on the town. Diamond hoops and stud earrings are also thought by consumers to have staying power throughout the decades. “People have less money to spend, so they tend to spend it on pieces with long-term relevance as opposed to things that are a flash in the pan,” says Krysta Fairclough, diamond specialist at David Fairclough Fine Jewelers in Toledo, Ohio. The buying team will make stops at A. Link, Brad Garman Fine Jewelry Design, and Frederic Duclos, among many other exhibitors.

Handmade 14k yellow gold leaf necklace with 0.48 ct. t.w. diamonds; $5,500; MARIKA Desert Gold, Tel Aviv, Israel; 97-298-854-007; mijmarika.com

Yellow Gold
Yellow gold is the hot metal, say buyers, thanks particularly to recent cues from high-profile celebrity events like the Academy Awards. Oscar winner Lupita Nyong’o (12 Years a Slave) and her all yellow gold Fred Leighton ensemble—gold and diamond snake bracelet, gold and diamond spiked ­crescent earrings, and gold and diamond headband—may single-handedly push the trend into mass-market territory. And the dramatic 28 percent drop in gold prices in 2013 certainly didn’t hurt. Gold, overall, saw its largest volume increase since 1997, the World Gold Council announced in February. Retailers JCK interviewed say they’re seeing the yellow gold resurgence mainly in fashion-forward pieces. But the metal is even making inroads in the traditional realm. “We are ­getting requests for yellow gold engagement rings,” says Lee Michaels’ Lopresto.

 

THE TOPICS
What’s influencing retailers’ buying and spending plans

By Whitney Sielaff

Monaco V4 Tourbillon in 41 mm square titanium case; $170,000; TAG Heuer, Springfield Township, N.J.; 973-467-1890; tagheuer.com

Six years after the Great Recession, the market for fine jewelry appears to have finally hit its stride. Exhibitors and buyers heading to the Las Vegas jewelry shows in late May and early June say the strengthening national economy is driving jewelry sales growth across regional markets and has set the stage for substantial inventory replenishment—and the fiscal big picture bears out those expectations.

U.S. Commerce Department statistics show that fine ­jewelry retail sales rose 6 percent in 2012, setting a new high-water mark of $71.3 billion. And jewelers predict that figure will be eclipsed when 2013 numbers are released, adding to the momentum that has carried through this year’s first quarter.

“The past couple years have been good for the industry,” says Ed Bridge, president and co-CEO of Seattle-based Ben Bridge Jeweler, which operates 70 stores across the western United States. “2013 will be a record, somewhere in mid-­single digits. Jewelry outperformed retail in the holiday season.”

Many jewelers report that big-ticket items are driving much of this growth. “Last year was an out-of-the-box year, big diamond sales and big watches—$75,000 and up in watches and $100,000 and up in diamonds,” says Richard Eiseman Jr., owner of Eiseman Jewels in Dallas. “The six-figure market was not five or 10 sales. I bet it was 40.”

Some regions have seen even stronger performances. “The real story is the submarkets,” says Jim Rosenheim, CEO of Tiny Jewel Box in Washington, D.C. “There are areas of the country that are doing very well: TOLA [Texas, Oklahoma, Louisiana, and Arkansas] with oil money, Florida. Things in Washington are absolutely booming. My top and bottom lines had their best year in 84 years in 2013.”

3.19 ct. Asscher-cut diamond ring with halo and melee; $105,640; Rahaminov Diamonds, Los Angeles; 800-742-8864; rahaminov.com

Jewelers say that affluent consumers are spending ­readily, outpacing growth within middle- and lower-income brackets. “The top end has been easier than the entry level,” Eiseman says. “The consumer who’s got truly discretionary money, great wealth, is dealing from emotion. They’re well educated, probably own a business or two, and now they’re reacting not to their wealth but to how their investments are doing. They’re looking for things that last. Jewelry is one of the last long-term luxury items that don’t depreciate if you buy at the top of the market.”  

Rising Consumer Confidence
Topping the list of positive factors buoying the market is a substantial resurgence in consumer confidence, which Craig Underwood, president of Underwood’s Fine Jewelers in Fayetteville, Ark., describes as “the No. 1 thing that drives the marketplace. If people are feeling good about themselves and the economy, they’re more willing to spend.”

Underpinning consumers’ growing good feelings about the economy: growth in the jobs sector and the subsequent rise in incomes. “All the economic numbers are going up, employment most importantly,” Bridge says. “If you connect the dots, you see jobs going up, 100,000 jobs a month. Incomes are going up. The average hourly wage was up last year on top of the increase in jobs. All that puts more money into the economy and leads to consumer confidence and consumer spending. Jewelry is well prepared to get its share.”

Improving Net Worth
As companies increase hiring, triggering unemployment to fall and wages to rise, consumers are also riding a hefty increase in net worth as equities markets boom and home values grow. “Everything mirrors income and wealth,” Bridge says. “The stock market is hitting record numbers again. Home prices turned around 10.2 percent in 2013 and are estimated to go up another 6 percent this year. As you see wealth going up, that affects what they’re willing to spend. And that clearly affects the jewelry industry.”

Photograph by Beverly Poppe
The popular VicenzaOro pavilion at JCK

The psychological impact of macroeconomic trends is not to be underestimated, say jewelers who spoke to JCK. “The market up 25 percent—that’s emotionally uplifting,” adds Eiseman. “You’ve bounced back. You’ve taken your capital loss and cleaned up your balance sheet against profits.”

Underwood believes jewelry sales correlate directly with home values. “As the housing market increases, people feel better about themselves,” he says. “Net worth goes up. That parallels what we do here in the store.”

Declining Debt
Further fueling jewelry sales is the dramatic reduction in consumer debt since the recession. While curtailed bank lending continues to affect financing at the manufacturing and supplier level, jewelers are finding that their customers are in a much better position to increase discretionary spending.

“The world is healthier, in particular the United States, in that we’re not extending credit to the people who can’t afford it,” says Marc Fink, CEO of Fink’s Jewelers in Roanoke, Va.

Now, even among lower-income brackets, shoppers are once again ready, willing, and able to buy jewelry, finding themselves with much greater disposable income.

A signature Tiffany & Co. style: Jean Schlumberger sapphire, red spinel, and diamond bracelet; $350,000

Daniel’s, which operates 65 stores across California, focuses on this segment and relies on both in-house and third-party credit for a large percentage of its transactions. “We went through a period after ’08 when people were really consolidating their debt,” says copresident Howard Sherwood. “But now they’ve really loosened up.”

The Uncle Sam Factor
Jewelers, nevertheless, are voicing some concern over the potential impact of current governmental issues on the market’s health. Of primary concern are regulations affecting lending as well as the handling of our industry’s core commodities of precious metals and stones.

“The regulatory environment, the impact of Dodd-Frank, and so many rules that are affecting the housing market—even though it has made a recovery of sorts—are all affecting us,” says Michael Pollak, CEO of Hyde Park Jewelers, which operates five stores around the country, including its Denver flagship.

Rosenheim, whose business is located squat in the nation’s capital, points to the ongoing conflict between President Obama and Congress. “In Washington, like other places, we’re all news junkies and have our eyes and ears peeled to what’s going on in the White House and Congress,” he says. “That’s a negative factor.”

Corporate Social Responsibility  
For others, concerns focus on the jewelry industry’s efforts to build a credible reputation for corporate social responsibility.

The “regulatory environment” is a big issue, says Hyde Park CEO Michael Pollak.

“Consumers, especially millennials, have expectations about brands when they’re making purchases,” says David Bouffard, vice president of corporate affairs for Signet Jewelers in Akron, Ohio, which operates Sterling ­Jewelers, including the Kay Jewelers and Jared the Galleria of ­Jewelry chains, and recently acquired Zale Corp. “Whenever they walk into a store, they have an expectation that that company has taken responsibility for its supply chain. They don’t want to be buying tainted goods.”

Michael Kowalski, chairman and CEO of Tiffany & Co., tells JCK that consumer focus on the trade’s concern for environmental and human rights issues is heightening. “Over the past five years, we’ve seen a real sea change in consumer awareness and concern about environmental degradation,” he says. “That’s translated into concern about corporate social responsibility and, in turn, how the thing before them came to be.”

Kowalski believes this has resulted from a change in consumers’ perception of the things they buy, from ­focusing purely on the product to showing wider interest in its ­origins and effect along the full supply chain.

“There’s a parallel interest in how that object came to be—in our case, specifically, the mining of gemstones and the crafting of the jewelry,” Kowalski says. “Part of every brand promise, even if it’s implicit, is that nothing horrific ever happened in the creation of this particular piece of jewelry. There’s a presumption that we as a brand have attended to all of those issues and have acted as a proxy for the consumer. The consequences are, if there’s an instance of irresponsible behavior, the consumer will feel a sense of betrayal.”

Bouffard says Sterling will concentrate on these issues at the JCK Las Vegas show, where the company plans to meet with its vendors to discuss how it expects them to participate in Responsible Jewellery Council initiatives and associated corporate responsibility issues.

Easing Commodity Prices
Also setting the stage for brisk business in Las Vegas are improvements in precious metal and diamond prices and the methods manufacturers have embraced to address them. Gold and platinum have moderated from the record highs they set consistently through the early stages of the economic recovery, and diamond prices have tapered off from the volatility they experienced through 2012.

Wild Rose rings in 18k gold with 0.06 ct. t.w.–0.19 ct. t.w. diamonds; $2,255–$2,875; Fope Gioielli, Vicenza, Italy; 39-044-428-6911; fope.com

“Manufacturers have adjusted techniques and product mix to address price points,” Pollak says. “In Italy, there were more open designs with large or multiple cutouts. After the recession, people repositioned themselves in a much bigger way in silver.”

Non-Endemic Product Competition
As jewelry price inflation has moderated, the industry is also benefiting from decreasing competition from product categories such as electronics, which several years ago consistently captured market share from jewelry sales.

Craig Rottenberg, president of Long’s Jewelers, a five-store operation based in Burlington, Mass., says falling prices have made electronics a nonissue for jewelers. “We don’t have the tech competition we did a few years ago,” he says. “Before, a TV was thousands of dollars. Now you can get it for under a thousand.”

Instead, he says, the bar has been raised. “Especially with the affluent, we see a lot of customers who are looking to make significant purchases—homes, boats, cars. When I say that, home could break down into redoing the kitchen for $100,000 or a new home. That’s the competition for what we do. We’re not competing with electronics anymore.”

Buying and Sourcing Plans  
Together, these underlying positive economic developments have prompted jewelers to plan optimistically for sourcing at the Las Vegas shows.

“Our purchasing has increased dramatically as our volume has grown,” Sherwood says.

Photograph by Beverly Poppe
The mood was upbeat at JCK Las Vegas 2013.

Rottenberg is upbeat about prospects for the year to come. “I think we’re going into Las Vegas feeling confident,” he says. For Long’s, a main focus will be on strengthening relationships with “partner” vendors as well as seeking more of these types of advanced-thinking suppliers. “Both manufacturers and retailers are getting more sophisticated,” Rottenberg says. “So it’s more about replenishment and what price points we need to hit. We’re going to be focused on partnerships that work. Not just who’s a good supplier, but who’s a good partner.”

For those vendors lucky enough to have partnered with the nation’s leading jewelers, the forecast looks sunny, indeed.

“We’ve just bought robustly for early-season orders based on how business was for the end of the year,” Rosenheim says. “If business continues, a lot of the inventory we have coming in now will need replenishment, and we’ll need to bring in new product to excite consumers. I feel optimistic about Las Vegas this year.”