Holiday Report: No Complaints!

Bracing for the worst, jewelers around the country were pleasantly surprised by Christmas season sales. Sales were late and lower-ticket compared with previous years, but Christmas was not canceled, as many feared it would be in the wake of war and economic woe. As reported on JCK‘s Web site Dec. 19, the International Council of Shopping Centers said mall-based jewelers reported a late-season turnaround in sales, and most of the independent jewelers polled by JCK on Jan. 2 said holiday sales either met or exceeded expectations. A few jewelers polled said sales were slightly—but not significantly—down, while others claimed this was their best Christmas ever.

Diamond supplier Zvi Gutentag of Galaxy Diamond in Los Angeles said, “The season ended up strong. We were down for September and October, but up for December. Overall, most of my customers did better than what they expected.” His observation summed up the general feeling: In an industry where even in good times complaining is de rigueur, this was one of the rare times the prevailing attitude saw the glass as half full instead of half empty.

Bill Merkley, owner of Bill Merkley Jewelers in Louisville, Ky., said 2001 holiday sales were up 19% over 2000. “We didn’t know what to expect, but we were tickled with the way it turned out!” Gary Gordon, president of Samuel Gordon Jewelers, a large independent store in Oklahoma City, said it was “the biggest Christmas season ever” for him. Having experienced terrorism in his own city, he observes, “People just got tired of being sad—that’s why we did better than expected. The same thing happened with the Oklahoma City bombing, Desert Storm, et cetera. Upscale retail has a history of suffering through such times, and it ultimately always pulls through.”

Two other large Midwest independents, Borsheim’s in Omaha, Neb., and Tapper’s in West Bloomfield, Mich., reported sales about even with last year, or in the case of Borsheim’s, perhaps very slightly lower than 2000 holiday sales, according to marketing director Adri Geppert. Still, she said, sales were “much better than we’d thought—we were braced for worst but it was better than we’d expected.”

Betsy Linsenmeyer, owner of Milkins Jewelers in Monroe, Mich., said sales were “down a little but not bad,” and the holiday just about met expectations. Richard Servis of Servis & Taylor in Los Angeles said sales were down compared with Christmas 2000, but better than Christmas 1999, and also about what he’d expected.

Becky Beck, owner of Becky Beck’s Jewelry in DeKalb, Ill., said November was down, December caught up, and the two months’ average was about the same or perhaps 1% higher than last year. Mark Parsons, co-owner of Hogue’s Jewelry in Beeville, Texas, said sales overall were steady, and Christmas Eve was busier than in the past few years. A fellow Texan, Mark Priest of Legend Jewelers in San Angelo, said his customers were literally “lined up” on Christmas Eve.

Consumers weren’t the only ones who waited till the last minute to buy. Amir Goldfinger of Rahaminov Diamonds, a Los Angeles loose diamond dealer, said, “It was very last minute. People didn’t have inventories. The day before Christmas was probably my best day of the whole month.” Garry Zimmerman of National Diamond Syndicate in Chicago also said he did the most business the last two weeks before Christmas. Indeed, although all the jewelers polled for this article said they were well stocked with inventory and had to rush-order very little, anecdotal evidence heard throughout the season ran to the contrary. Goldfinger’s and Zimmerman’s experiences were common among manufacturers—even extending to packaging firms. Mike Kaplan, president of Bronx, New York-based Rocket Box, said jewelers who realized they were short of jewelry to sell also discovered they needed more boxes to put it in.

Three jewelry firms that opened new stores or expanded existing stores this year reaped the rewards. Phil Korst, general manager of Minneapolis-based R.F. Moeller Jewelers, said holiday sales were up 3% over last year, and he attributed much of that growth to the new $2 million store the firm opened in nearby St. Paul. For George Fox Fine Jewelry Works in Ventura, Calif., a move to a larger location boosted foot traffic enough to double last year’s holiday sales figures. New Jersey jeweler Arthur P. Groom Co. enjoyed similar results after it expanded.

Diamonds were the top-selling category for the season. Jewelers reported brisk sales of diamond earrings—hoops and studs in particular, plus three-stone diamond rings and pendants—as well as a rise in bridal jewelry, both engagement rings and anniversary rings or trade-ups.

After diamonds, the most popular categories were traditional standbys and other sentimental sellers. Creig Sterrett, owner of Sterrett Jewelers in Columbia, Mo., said best sellers included charms, charm bracelets, mothers’ rings, and traditional items such as diamond earrings and anniversary bands. “We had calls for brooches—cameos, plus someone wanted an onyx and gold link-style bracelet and matching necklace—and it’s been 10 years since anybody has asked me for a brooch! We sold more ladies’ watches than men’s [85% women’s watches to 15% men’s watches, as opposed to his more typical 60% men’s to 40% women’s]. We also sold more mothers’ rings this season than in the past five. [Customers] brought in old jewelry to be restyled. An old lady brought in ancient mine-cut stones, said they were her grandmother’s, and wanted them reset for her sons.”

At Gilbert Roskin Jewelers in Marion, Ind., sales were brisk in “past-present-and-future bracelets and rings,” and patriotism was the order of the day. Jeweler Dan Leif says the store sold “a ton of Isenberg flag pins!” Finally, while fashion looks didn’t have a particularly strong year, a few jewelers reported solid sales of the best-known designer names, Lagos and David Yurman.

Sales this season were lower-ticket than previous years. Most of the jewelers polled by JCK did brisk business in items priced under $500. More upscale stores, such as Samuel Gordon, Bill Merkley Jewelers, Arthur Groom Co., Dunbar Jewelers of Yakima, Wash., and Lowell Hays Jewelers of Memphis reported higher-priced goods (average $1,500) as their best-selling categories, although Dunbar’s Pat Gilmore also reported a drop in loose diamond sales.

Some stores, like Tapper’s in Michigan and George Fox in California, did brisk business in two distinct price point categories: $400-$700 or over $1,200. With few exceptions—notably Arthur Groom and Gary Gordon—the worst-performing category was the “big sale,” i.e. goods carrying five- or six-digit prices. In fact, goods over $5,000 were a tough sell.

More good news: For the most part, consumers remain quality oriented. This was most evident in diamond demand. Diamond dealer Itchy Heschel of J. Kleinhaus in New York said people wanted “medium to better goods. They went down in carat size, but not in quality.” National Diamond Syndicate’s Zimmerman concurred.

Joseph Schlussel of The Diamond Registry in New York found demand for larger stones higher than for bread-and-butter stones, but he also saw a significant number of lower-priced goods moving briskly. Mitch Lisker of Absolute Brilliance in New York agreed: “People seemed to buy a little lower quality and smaller size than they used to. You saw a lot more of the cheaper goods move.”

Schlussel’s overview of both industry and consumer sentiment was similar to Gary Gordon’s observation that people are tired of being sad. Said Schlussel, “I think there’s been a change in attitude. In September, everybody was scared about terrorism. Jewelers did not have the confidence to buy. But by the time Christmas came along, people realized they still had to celebrate and they still had to live. Now, people have more faith in America and themselves.”