Are We Seeing a Thaw?

 

We are definitely seeing some good (not great, but good) signs in the economy – the first we have seen in a while. Time magazine just announced that we may be seeing “the beginning of the end of the recession.” Which doesn’t mean we are seeing the actual end of the recession—for example, unemployment’s still rising – but for now, we’ll take it. 

 

Likewise, it seems the trade’s beginning to thaw a bit—and we are getting, as I wrote last week, away from crisis mode, and into a regular old recession. (It’s a pretty severe recession, but again, we’ll take it.)

 

Of course, it’s still tough times, based on everyone I’ve talked to this week. Basel will probably only be so-so. Many big companies – including De Beers – have financial issues that were unimaginable a few years ago. And clearly the spate of business failures of U.S. retailers and companies has not run its course—although some think the surprising thing is just how few companies have failed (so far.)

 

It could be quite a bit before this industry is in full-fledged recovery mode, no matter what happens to the broader economy. This might be due to the old axiom that the trade is “the first to be hurt, the last to recover.” But this trade still has challenges – it needs to figure out how to inject excitement into its product, how to reach new consumers, and how to promote itself (for instance, there has been no resolution of the question of generic advertising.) Sometimes downturns are good for clarifying these issues. But this time everyone’s been so much in “survival mode” that hasn’t really been done.

 

So I ask you: Are you seeing things improve? And will the surviving players be able to gain market share when we’re out of this? Or are we just looking at a smaller market overall?

JCK News Director