Holiday Jewelry Sales Get Mixed Reviews

For many jewelers, holiday 2005 was a merry time, but for others, it was disappointing. At press time, a JCK survey of retailers produced reports ranging from moderate to overwhelming holiday sales increases in the South and Midwest to disappointing returns in the Mid-Atlantic and Northeast. Some retailers cited consumer optimism correlating with the local economy as a prime indicator of their business performance while others concluded that a Sunday Christmas date and a late Hanukkah greatly altered shopping patterns. JCK’s findings differed substantially from national retailing results for the industry—MasterCard Spending Pulse Data Services recorded a 4.6 percent decline in jewelry sales.

Southwest. Inclement weather might explain why sales in the Southwest slumped for some of the retailers surveyed about this holiday season. William Cano of Cano’s Gold & Diamonds, San Angelo, Texas, cites the “economy and hurricane season” as reasons for sticker-shy customers’ cautious purchases. But the season brought yuletide joy and significant sales increases to other stores in the region and all agreed on the late surge in Christmas purchases. Susan Eisen of Susan Eisen Fine Jewelry and Watches, El Paso, Texas, noted that Christmas shopping was sporadic: “It was difficult to staff, [and we] never knew how many people to have on hand.” Fellow El Paso jeweler Ellen Lacy of Lacy and Co. said fully 25 percent of her holiday business was done late in the season.

The late-shopping trend has been ongoing; in a Dec. 27, 2005, Philadelphia Inquirer article about holiday shopping, retailers observed that Dec. 25 has become an intermission in, not the culmination of, holiday shopping. The week after Christmas proved as busy as the weeks leading up to it, although retail experts cite gift cards (which typically don’t affect jewelry store sales) for driving much of the post-holiday traffic.

No single item proved to be a hot commodity in the Southwest region, although jewelers did note that diamond and expensive designer jewelry were popular.

South. All jewelers JCK surveyed across the region boasted at least moderate sales increases for the holidays. Phillip Pitts, president of the Mississippi Jewelers Association, told JCK 20 percent of the jewelers in the state were affected by Hurricane Katrina, but that more than half were reopened for the holiday season and all those he contacted said sales were higher than last year. One jeweler even had applied for a small business loan, thinking his business would be devastated by the hurricane—but after the holiday, business was so strong he no longer needs the loan. Diamonds were reported to be the strongest seller, mainly in the $2,500 to $3,000 range.

Retailers interviewed by JCK cited a significant number of big spenders buying high-ticket items, which accounted for some of the stores’ increases. Craig Underwood of Underwood Fine Jewelers, Fayetteville, Ark., estimated a 3 percent increase in holiday sales, owing to an increase in larger-ticket sales and a “reduction of customers buying small.” Buyer John Thompson of the Mednikow Jewelers store in Atlanta cited strong sales growth, “well over 10 percent,” and also attributed the change to higher-price-point merchandise. Diamond jewelry was the star for Gause & Son, Ocala, Fla., with “nice watches” like the Philip Stein line also selling well. Colored stones were a popular seller for Bill Brundage Jewelers in Louisville, Ky.

West. Business didn’t follow a clear-cut trend in the West, which saw its share of winners and losers. At Harding Bulloch Jewelers in Pueblo, Colo., manager Annie Rayo reported a 25 percent increase and in St. George, Utah, Jon Parke of JK Jewelers saw his store’s sales performance double compared with last year’s numbers. Business was also very strong at Hyde Park Jewelers, based in Denver.

“Marketing paid off,” said Bruce Chase, director of diamond merchandising. That, and being well-stocked with both basic and designer merchandise. For Hyde Park, the season started strong in November and didn’t quit—Chase says the firm had a few record-breaking days in the last week of the season, but by then had already made its goals anyway. High-end goods did very well at Hyde Park, especially big diamonds, he said.

Those closer to the coast, like Malcolm Koll of Charles Koll Jewelers in San Diego and Howard Skalet of Sacramento, Calif.–based Skalet Family Jewelers, reported sharp declines in holiday sales, but everyone had a busy week before Christmas. As for sales trends, Tony Mohr, co-owner of Visions in Gold, Wheat Ridge, Colo., noted two: “Increasing use of credit cards—way more than checks and cash—and a lot of people getting stuff sized that they bought on the Internet.”

An optimistic John Beesley of John Beesley Goldsmith in Provo, Utah, offered hopeful words for the jewelry industry, along with a word of warning: “[I’m] encouraged about the industry, [but we need to] get creative with the Internet and other technologies.”

In Anchorage, Alaska, Yasmin Schoenke of Platinum Jewelers reported slightly higher sales but lower volume—and lots of last-minute purchases.

“At our store, most are prepared, but we always have last-minute surprises. We are not surprised anymore. Quite a few [buyers were] last minute, and they were big spenders.”

Mid-Atlantic/Northeast. The majority of companies interviewed in these two regions had downturns. Of the stores that did report an increase, positive margins were slight or “about the same” as last year. Howard W. Diamond of Fairfield Center Jewelers in Fairfield, Conn., said Circle of Life pendants and Hearts On Fire diamonds were popular but still couldn’t pull business up significantly over last year’s.

Similar results were reported by Dale Perelman, president of King’s Jewelry, the New Castle, Pa.–based chain with stores in western Pennsylvania, Ohio, and West Virginia.

“December was up about 1 percent—not at all what we had hoped to see. We were off almost 10 percent until the last week, making it a very late season. We used a different type of discounting, a gift card, but markup was fractionally better than 2004.”

Perelman also reported Circle of Love pendants were hot, and gold and watches both showed strong gains at King’s.

John A. Michaels, whose Waterbury, Conn.–based chain of stores suffered a 4 percent downturn in sales, believes other categories—especially electronics and travel—supplanted jewelry this year. “Customers [were] not buying jewelry this year,” he lamented.

Meanwhile, a store owner in Maryland, when asked about shopping trends, replied: “No shopping at all—that was the trend I noticed.”

Midwest. Stores in the Midwest saw a lot of action during the week before Christmas, and many in the region enjoyed hefty year-end sales increases. Buyer Scott Robinson of Farr’s, Idaho Falls, Idaho, says procrastinating shoppers were his store’s saving grace. “It was a little jittery in the beginning, off and on, but then they came out and brought [sales] up,” he says. Lynn Borias of Hal Davis Jewelers, Boise, Idaho, says her store “sold a lot in the last week,” mostly because of Christmas falling on a Sunday. She also says her store’s estimated 20 percent holiday gain was the result of the longer shopping period.

At Moyer’s Jewelers in Carmel, Ind., sales were up 21 percent for the year, but owner Dan Moyer attributes that to a few big—and late—sales for the holiday. “The store’s base increase was about 5 percent,” he said.

Sophia Asare, with additional reporting by Laura Finkelstein, Gary Roskin, Hedda Schupak, William George Shuster, and Carrie Soucy