Despite Goldesign Jeweler’s location, far from Ground Zero, business took a hit after September 11, 2001; the comeback wasn’t as robust as owner James Dixon has hoped for. By 2005, Dixon was "breaking even" on sales, with declines on the horizon. In 2006, sales were $850,000; in 2007, they dropped to $596,000; and they plummeted yet again to $360,000 in 2008.
Also during those years, an aggressive competitor surfaced: Internet diamond sales. These started rising, particularly among the college co-eds in his town who conducted thorough research online before coming in to consider a purchase. And since Goldesign’s niche is bridal, mark-ups were affected (keystone instead of triple key) and margins started dropping–from 40 percent in diamonds to just 18 – 20 percent–"if I even got the sale," Dixon notes. More young shoppers appealed to Dixon only for inexpensive mountings. "Methods of buying have changed," he says.
Then when the downturn in the economy hit, Dixon saw a 40 percent drop in volume of sales within one year. When young couples did come in, they were bringing grandma’s diamond or an Internet-bought stone for setting instead of buying a new rock from Dixon. More and more, consumers leaned on Dixon for services and not retail sales. "Our services have kept us alive," he says.
Perhaps the proverbial nail in the store’s coffin is the fact that Dixon’s in-town competition totals 20+ other jewelers. "It’s a highly competitive diamond market," he says. "I don’t see [the economy] turning around fast enough for me to get my investment back, and I can’t keep feeding the retail losses. The margins are skinnier and there are fewer customers through the door for our expertise."
Dixon started in the business as an apprentice for his father-in-law in 1983 at Huntington Jewelers in Las Vegas. During that six-year tutelage, Dixon learned wax carving, hand engraving, and more. He moved to Provo to finish his bachelor’s degree at Brigham Young University, then working as an independent manufacturer and bench jeweler for area businesses. He nearly completed his Graduate Gemology degree from the Gemological Institute of America (he finished all of the coursework, but has two exams outstanding). In 2005, Dixon bought Goldesign Jewelers from its previous owner. "We’ve done a lot of beautiful work here," he says.
Though Dixon cites the rise of Internet jewelry sales as a reason for his own declining revenues, he did not feature e-commerce on his web site (his was purely informational). "I don’t think I could have done anything more," he says of the way he ran his business. "The only difference between [Goldesign Jewelers] and the [other jewelers in town] is that they have more capital to weather the storm."
The store will cease operations completely in mid-September. In the meantime, Goldesign Jewelers has contracted with a liquidation firm to hold a going-out-of-business sale that started last week.
On a brighter note, Dixon interviewed with a prominent regional jeweler this morning. If that possibility doesn’t develop, then Dixon may consider offering trade work and services on a smaller scale. [Whatever Dixon’s next step may be, stay tuned for the happy announcement on JCKonline.com and in the "Stores" section in print.]
And on a wry note, Dixon knows he’s far from alone in the arena of businesses in distress–even outside of jewelry. A friend in Las Vegas who is a mortician confided to Dixon that even his revenues were down 50 percent. The reason: "People aren’t buying the caskets and services they used to," Dixon told JCK.