Platinum is enjoying its first true resurgence in jewelry since the government declared it a strategic metal in World War II, but its pricey image can turn off as many consumers as it turns on.
While admittedly this isn’t jewelry for the promotional market, quality-minded consumers can find a growing amount of attractive platinum that doesn’t require the Pentagon’s budget.
We won’t prevaricate – if funds are tight and you want platinum, the piece will be modest. But increasingly, value-savvy consumers are choosing top-quality restraint over lower-priced abundance.
Customers at Diamonds In the Grove, for example, are snapping up platinum almost as fast as jewelers Jane and Steve Fried can supply it. The store, located in an upscale outdoor mall in Coconut Grove, Fla., has a fashion-conscious clientele riding the trend of small, delicate jewelry. Jane Fried executes many of the popular styles – lariats, “Y” chains, ball chains and bezel-set diamond stations – in platinum, most of which retail for $450 to $650. Customers, many of whom are vacationers, are drawn to the fashion of the piece, fall in love with its substantive feel and are surprised to find they can own platinum for so little. For that price, says Jane Fried, it doesn’t have to be a planned purchase. In fact, most of her platinum customers buy impulsively the first time – and come back for more.
“We keep a lot of melee on hand, so customers pick out their diamonds, usually 20 pt. or so, to make a quarter-carat or a third-carat total,” she says. “Then we set them in bezels on a platinum chain. It really excites them because they feel they’re getting a ‘custom’ piece of jewelry, and we don’t charge any extra for the service.”
More and more of Indianapolis jeweler Gary Thrapp’s customers also like fashionable small-scale jewelry, so he’s been converting his inventory to reflect this trend. He picks designer Penny Preville’s new platinum line as a potential best-seller in this vein. “I’m seeing people buying quality, driven by fashion. People think of platinum as quality,” he says. “They expect to get quality, not a cheap deal, in platinum.”
Platinum Jewelers of Anchorage, Alaska, lives up to its name, selling virtually nothing else. While the lion’s share of the company’s inventory retails between $1,000 and $2,000, there’s still a significant portion that retails for less than $1,000. Jeweler Heinrich Schoenke says most of these pieces are small rings, pendants or wire bangle bracelets. His lowest price tags hang on a 16-in. platinum chain ($238) and a pendant of Alaskan gold nuggets on platinum ($248). “The pendant is 70% platinum. It’s not a little platinum on gold,” he says. “Since I do most of the work here, I can match my customers’ budgets.”
His customers are not surprised to find there’s such a thing as inexpensive platinum jewelry. Because 95% of his stock is platinum, customers expect him to have a wide range of prices.
Making the sale
Jewelers who successfully sell affordable platinum say display, education and product design are all important, but the most compelling argument for choosing platinum over less costly white gold or silver comes from simply putting the piece in the customer’s hand. “You have to make them put it on. People think my pieces are small and dinky until they put one on,” says Jane Fried. “It’s a design-driven sale. Customers want the white metal look, but many of them have no idea they can afford platinum.” Two-tone, with 18k gold, is also very popular and makes platinum even more affordable.
Proper display is critical. Even though her pieces are diminutive, Fried displays each one singly, as though it were a major piece at Harry Winston. Just because it’s small doesn’t mean it’s unimportant, she says. She uses bluish-gray display pads and busts, adds halogen lights, offers Platinum Guild International support materials and puts the platinum case front and center. “People figure if something’s in front, it’s the nicest,” she says.
But no matter how arresting the display, it won’t sell the product without trained salespeople to show customers why platinum jewelry is significantly more expensive than gold, though the metal itself doesn’t cost much more per ounce.
Retailers occasionally encounter price resistance based on that point. “We do sometimes have to explain the difference [between platinum and gold prices] because without education it doesn’t make much sense,” says Thrapp. “But because we cast and fabricate platinum here, we can explain the higher temperatures and different manufacturing techniques that require higher skill levels. And we explain its properties are like the back of an Oriental rug – it lasts forever.”
“I explain platinum’s durability, purity and wearability,” says Debbie Greene of Helm’s Jewelry, Columbia, Tenn. “I usually have to go through the price issue only once. Customers have always known us for quality, which probably makes platinum a little easier to sell.” Columbia is a small town with fairly conservative tastes, so Greene wears platinum herself – a diamond inherited from her grandmother, reset in a contemporary bezel ring. She says if you want to sell platinum, you have to be willing to put it on yourself. She gets many compliments on her ring, especially when she lets customers hold it and feel its weight.
Establishing a reputation for stocking high-quality pieces makes selling platinum easier. “We don’t get much sticker shock,” says Mary Haltom, a jeweler in Fort Worth, Tex. “After we explain platinum’s qualities, our customers just kind of expect it will be a little more.”
Platinum may be catching up to its famous yellow rival as a prime woman’s self-purchase category. While bridal sales lead the overall platinum pack, fashion sales are growing also. Jewelers say the primary customer for the category is a fashionable woman in her late 20s to early 50s.
Most jewelers who sell platinum have a solid business in higher priced pieces. Indeed, far more fashion platinum sales are over $1,000 than under, but jewelers are happy about the growing amount of starter platinum jewelry available. Inevitably, some customers have more taste than money, but someday, when those customers can afford what they want, they’ll be committed to the jeweler and the metal.
“It’s certainly a growth area for us. It’s growing as fast as we can keep it stocked,” says Haltom.
AFFORDABLE PLATINUM: ONE DESIGNER’S STRATEGY
Renowned platinum jewelry designer Rudolf Erdel of OE Design Inc., New York, N.Y., has developed a new line as a more affordable entry to platinum ownership. The “Platinum Accents” line was created for retailers who want to carry his signature OE Design line, but don’t have the customer base to support it.
Erdel adopted the apparel-based concept of creating a diffusion, or secondary, line, much like Calvin Klein’s CK or Donna Karan’s DKNY brand.
Erdel’s diffusion line shares the clean, modern and wearable look with the higher-priced line, and combines with quality workmanship and a good merchandise assortment. The line features two-tone styles with gold, smaller stones and a more delicate scale that brings prices down on a par with better 14k gold.
Erdel says this is a good entry for consumers who want to own fine design and workmanship in platinum, but who have little money to invest. They are, as he says, the fine jewelry buyers of the future. As they build their wealth, they’re also building appreciation.
THE 585 DEBATE
Some manufacturers say 585 – a lower-priced alloy containing 58.5% pure platinum – is the way to go, embracing the idea of a “14k” version of platinum. They say this is an important development that will bring the metal within the reach of many more consumers, and that it shouldn’t be ignored or prevented.
“American commerce works because we try to market to as many buyers as possible,” says Jack Granofsky, president of Braunstein, New York, N.Y. “We do not grow when we try to exclude others by protecting a single strategy of marketing only to those who can afford it.”
Marvin Markman, president of Suberi Bros., New York, N.Y., is another proponent of letting consumers decide. His company shipped a line of 585 platinum to its first test-market chain retailer, Gordon’s Jewelers, in mid-December. Markman says the product experienced about a 20% sell-through in the last two weeks of December. At press time, the 585 was set to roll out for further testing in J.C. Penney and Service Merchandise. “If the consumer says no, nothing I can do will change the market,” he says. “By April, we should know.”
The Platinum Guild International disagrees, arguing that platinum’s chief appeal is its purity and rarity. PGI says diluting the metal to a “14k” version taints its image and reduces it to a commodity. Furthermore, says PGI’s Caroline Stanley, the 585 version has to be rhodium-plated to give it the same look as pure platinum, and eventually that plating will wear off. Part of the reason to choose platinum over white gold is that it doesn’t have to be plated. PGI says the production and refining costs of 585 platinum will negate much of the savings.
Regulatory agencies are expected to weigh in with their opinions. The Federal Trade Commission is debating whether to adjust the platinum hallmarking standards in its overall revision of the “Guides for Jewelry, Precious Metals and Pewter Industries.” The current voluntary guidelines, in place since the 1920s, say a metal that is 50% platinum and 50% other Platinum Group metals may be termed platinum. But the International Standards Organization requires anything hallmarked platinum to be at least 85% platinum. PGI launched a letter campaign last year in support of the tougher standards. To date, the FTC has received more than 800 letters from the industry backing this position, says PGI-USA President Laurie Hudson. A decision is expected early this year, but had not been announced by press time.
PGI has plenty of support in the manufacturing community. Rudolf Erdel, president and designer of OE Design Inc., New York, N.Y., issued a position statement in November 1996. His comments echo those of many platinum manufacturers. Here is an excerpt: “We were one of the first manufacturers capable of producing jewelry with 58.5% platinum. However, we were very concerned that consumers would be misled because, by its very content, 585 is not real platinum. We also did not find 585 to be an acceptable substitute … as the infusion of other metals and alloys greatly compromised the very nature and benefits of platinum. The retail price savings between 950 and 585 platinum, because of production and labor costs, were not proportionate to the loss of value in the metal content.”
JCK asked fine jewelers who already sell affordable platinum jewelry whether they would welcome the chance to sell a less expensive version. These retailers resoundingly said no. All stress the metal’s purity, strength and density as its chief selling point, so they’re not eager to see this change. “Never, ever, will I offer 14k platinum. I don’t even want to go below 950 platinum,” says Heinrich Schoenke of Platinum Jewelers, Anchorage, Alaska. “Platinum makes a nice argument of more value for your money. You’re getting 95% pure metal, as opposed to 18k gold, which is 75% pure metal and 25% junk.”
“If you decrease its purity and bring it down to where it’s affordable, you’ll lose its appeal,” echoes Jane Fried of Diamonds in the Grove in Coconut Grove, Fla.
Forth Worth, Tex., jeweler Mary Haltom agrees. “I think they should leave platinum the way it is. With gold, the different karatages are already accepted and understood. But I think to offer different kinds of platinum will only confuse the customer,” she says. “Customers have in their minds exactly what platinum is.”
There’s no need to go to 585 to ensure the affordability of platinum, says PGI. Its new platinum jewelry starter kit includes a number of pieces retailing under $1,000. PGI argues that the platinum market is a boom market, bringing better profits to manufacturers and retailers. Since it’s selling so well in its current state, there’s no need to sell down, says PGI. But if the public ultimately decides it wants the option of 585 platinum, says Hudson, then PGI will do its part to educate retailers and consumers as to the difference in metal standards.