Last June this page was titled “The Wolf at the Door,” referring to the numerous challenges facing the jewelry industry. It concluded by saying that whatever 2008’s yearly update would bring, it wouldn’t be boring.
How true! Though I daresay many in the industry would welcome a little boredom as a respite from so much tumult. Gold tops $1,000 an ounce. Platinum goes over $2,000 an ounce. The U.S. dollar dives to the bottom of the tank. Friedman’s declares Chapter 7. Fortunoff declares Chapter 11, seemingly out of nowhere, though the furniture and home-goods industries seemed to know about it long before we did.
Last June, the red-hot housing market had cooled off, and there were indications of major trouble, but the mortgage-industry meltdown and subsequent credit crunch were still a few months away. To be fair, we knew the time to pay the piper was coming for home owners with introductory ARM rates about to reset, and we knew gasoline was getting steadily more expensive—but we didn’t anticipate a sharp increase in food prices, nor the extent to which the mortgage industry was built on a house of cards, no pun intended.
A year ago, these factors already were affecting the mass market, but affluent consumers still felt fairly well insulated from the problems. But by year’s end, the zeitgeist of fear grew so pervasive that even affluent consumers began to rein in spending. I don’t recall who said that it seemed as if America got a collective “Stop shopping!” text message last November, but it’s a great analogy, and I apologize to the anonymous pundit for the lack of direct attribution.
Admittedly, the media never lose an opportunity to highlight bad news, though closer analysis reveals that the percentage of consumers who aren’t in financial trouble or planning to scale back consumption is still greater than the percentage of consumers who are. But there’s no question that the times have made everybody but the super-rich nervous, and consumers at all levels of the market have made some trade-offs, whether large or small.
Jewelry doesn’t have to be what’s traded off. As I sat writing this page, the May 5 issue of Newsweek hit my desk, and in it was a survey of what women want for Mother’s Day. Sixty-nine percent of moms polled expect a gift from their significant other, says the magazine. Forty-one percent want jewelry, 40 percent want flowers, and only 12 percent said they’d be happy with just a card. Recent data presented by the Diamond Promotion Service during the American Gem Society Conclave reminded jewelers of the importance of birthdays as a gift occasion—something that often flies under the radar. Most advertising focuses on the holiday season, but it’s not uncommon for the amount spent on a birthday gift to exceed that spent for a holiday gift.
It’s gratifying to see an increased focus on social issues across the board. This month’s cover story features an exclusive interview with business mogul and philanthropist Russell Simmons, whose passion—and compassion—for the African continent and her people gave birth to the Diamond Empowerment Fund. As journalists reporting on the story, Rob Bates and I were impressed with both Simmons’s dedication and the goals of the DEF organization. I personally believe it is incumbent upon all of us who derive our livelihood from this industry to somehow give back to a land and people who largely make it possible. Africa has given us diamonds, gold, platinum, and a variety of colored gemstones. We’ve done a fair bit of good in Africa, but relative to the wealth her ground has surrendered, we’ve received much more than we’ve given. Of course, there is need in underdeveloped gem-producing nations in South America and Asia as well, but the level of need seems greatest in Africa.
Our own worries and stresses about profits, payroll, and competition are very real and not to be taken lightly. Still, we are the fortunate ones, and if anything can make one feel better, it’s helping others who have even less—especially when they’ve helped us get where we are today.