Has the Jewelry Industry Turned the Corner?

It’s standard for people in the jewelry industry to say they
are “cautiously optimistic.” And, as we begin 2011, there are reasons to be
optimistic. And plenty of reasons to be cautious as well. 

Here are some interesting stats:

– According to the Jewelers Board of Trade’s annual
statistics, the number of store closings in 2010 decreased 3% from 2009. That
doesn’t sound so exciting, except when you consider that the year before (2009)
store closings increased 50%. (Yes,
you read that right: 50%.) 2010 was also the first year since 2007 when more
stores were up-rated stores than down-rated.  All signs of improvement, but not spectacular ones. 

– SpendingPulse recently reported that jewelry
sales increased 8.4 percent
this holiday season. In 2009, the same
MasterCard division (which I should note, estimates sales based on more than
just credit charges) reported that jewelry sales were up
5.6 percent
for the holiday.

SpendingPulse didn’t break out jewelry sales for Christmas
two years ago, but they
seemed to indicate
they saw a pretty steep decline:

Luxury sales showed the largest
year-over-year declines [in 2008], with sales down by more than 34 percent over
last year, according to MasterCard Advisors’ SpendingPulse, a macro-economic
report tracking retail and service sales nationally. However, when jewelry is
excluded, luxury sales are down slightly over 21 percent compared with 2007.

So, even if SpendingPulse is correct that jewelry sales have
risen some 14% in the last two years, we still have a ways to go before we
make up the ground lost in 2008.

After Christmas, I called a number of jewelers about their
sales. Some had some pretty impressive numbers: Up 10, 20, even 25 percent. In
normal years, those stats would be cause for celebration. But this time, they
just seemed relieved. After all, we have just emerged from a period where 40
percent drops or more were not uncommon.  Everyone is still clawing their way back to where they were. And it may still take a few years to get there.

The good news is, over the last year, the industry’s
mind-set has improved considerably. People are upbeat, and have snapped out of
the defensive “survival mode”
crouch they adopted in 2009 and are looking for ways to move their business
forward.

But the industry is recovering.  It’s not there yet.

JCK News Director