As JCK Las Vegas 2013 opens May 31, one senses, throughout the trade, the faint stirrings of optimism.
Sure, the attendees at Mandalay Bay will tell you there is still plenty to be wary of. Retail sales—and the overall economy—are not where they should be. Many companies continue to struggle. And a lot of jewelers still prefer -consignment to outright buying. Gold prices have fallen, but they remain a little too high for most jewelers’—not to mention consumers’—taste. (At press time, they were hovering around $1,400.)
But there is plenty of good news as well. While Christmas 2012 sales registered mostly below expectations, Valentine’s Day and Mother’s Day both did well, according to JCK retail surveys. The majors—including Zale, Signet, and Tiffany—are all reporting better-than-expected results. And the U.S. Commerce Department says jewelry sales rose an impressive 10 percent in the first quarter. Preregistration to both the JCK and LUXURY shows was up.
JCK Events group vice president Yancy Weinrich cuts the ceremonial ribbon.
“The economy has bounced back quite a bit and retailers are looking to buy,” says Shant Hovsepian, national sales director for JCK vendor Danhov.
Steve Feldman, vice president of sales and marketing for Hasenfeld-Stein, a New York City–based diamond company, was “extremely encouraged” by the first days of LUXURY. “We had a great day [Wednesday]. There is a lot more confidence in the air,” he says.
“Things are going really well,” says Adelaide Polk-Bauman, PR director for Forevermark. “The thing I keep hearing is ‘electricity.’ There is an electricity in the air.”
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Retailers seemed to share the good feelings.
“It’s been a great year,” says Lisa Bridge, vice president of education for Seattle-based chain Ben Bridge Jeweler. “We brought a big team with us. We’re excited to see what’s out there.”
Greg Twarowski, owner of Carats Fine Jewelry & Watches, a new store in Sarasota, Fla., as well as three pawnshops, says he’s definitely seeing a better mood among consumers.
“The confidence is stronger. Hopefully, that will continue. In Florida, there is definitely a more upbeat market overall. Real estate is starting to boom again, especially the market that is $1 million and up,” he says.
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“Everyone is very optimistic, in stark contrast to a few years ago,” agrees Robert Mednikow, owner of Mednikow Jewelers in Memphis, Tenn. “A few years back, we gave token orders just to help our suppliers stay in business. But now we are buying Christmas inventory and placing big orders.”
At a May 30 seminar titled “Industry Issues and Trends,” The Guide publisher Richard Drucker was a little more guarded, saying he was getting “mixed and volatile” reports from the trade. “You have some people that say they are doing great, but not everybody,” he said.
Rubies and sapphires have experienced an increase in prices, he added, so now retailers have a harder time stocking them. “You are seeing fewer choices for consumers, because all stores have a similar inventory mix,” he said. By contrast, pearls and fancy colored diamonds have become more popular.
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He said the fancy colored diamond market is “excellently positioned” for long-term growth; since true natural colored diamonds are so rare, they are difficult to comparison shop. But one challenge for that market: Parcels are sometimes “salted” with synthetics and treated and coated stones, he said.
And one ongoing issue that affects the entire trade: inflated lab reports. “Why do inflated grading reports exist?” he asked. “They exist because people use them.”
Based on his calculations, he said, one lab’s stones sell at a 27 percent discount to the GIA’s. “If you do sell those reports, the customer needs to understand, that lab doesn’t give the same grades as GIA’s,” he said. “When people come in for appraisals, we usually explain to them that their diamond probably doesn’t have the same grade that is on the report. It’s a problem when consumers think that they are getting something else than what they are getting.”
He worries this issue could eventually pose a consumer confidence issue: “How long can we go on fooling the public? We sell a luxury item and it’s a tough economy.”