Most news reports paint a weak picture of holiday retail sales, but sales of fine jewelry can best be described as “all over the place.” Some independent jewelers posted huge gains, others posted modest gains, and still others had a slow holiday but a good year. A few reported flat or lower sales. Many prepared for the season by stocking—and selling—lower-priced goods. (Note: At press time, most chain stores, department stores, and mass merchants had not finished tallying holiday results or, because of federal laws regarding disclosure of financial information by publicly traded companies, were not able to comment in time for JCK‘s deadline. Results from these companies will be reported on JCK‘s Web site, www.jckgroup.com, as they become available.)
In terms of products, the Diamond Trading Company’s increase in holiday ad spending paid off. Many jewelers reported their best sellers were diamond stud earrings or three-stone diamond jewelry, both of which were prominently featured in some of the DTC’s advertising. Jewelers such as Nicholas Ferro of N.T. Ferro Jewelers in Woodstock, Vt., Joseph Genovese of Michael Genovese Jewelers in St. Louis, and Linda Bevill of Smith & Bevill Jewelers, Beaverton, Ore., attributed holiday success to increased advertising and inventory.
Howard Skalet of Skalet Family Jewelers, Sacramento, Calif., says his holiday sales were up 25%. He says .75-ct. diamond rings were particularly good sellers, but sales were good throughout the store. “It was a really good season,” he says. “It didn’t happen until the end, the last two weeks, but it was really good.”
Judith Anderson of Bijoux Extraordinaire in Manchester, N.H., had a similar experience. “We were surprised. We were expecting to be kind of off because of the economic climate and the limbo over whether or not we’re going to war, [but] sales were up 55% in December.”
Anderson’s store specializes in custom design, but she also stocked more moderately priced finished goods this year. Her best sellers were fancy-color diamonds, high-quality sapphires, platinum jewelry, and star sapphires.
Matt Wilson of Wilson and Sons in Scarsdale, N.Y., posted a “strong” increase for the holiday and year overall. His best sellers were diamond studs, three-stone rings and pendants, and Rolex and Christian Bedat watches. Average price points for holiday sales were $1,500 to $4,000. His store sold out of 1-ct.-plus diamond stud earrings during the last week before Christmas. “I had to scramble on the 23rd to match more stud earrings. It’s always good when that happens!”
Denise Harned of Raymond Jewelers in West Hartford, Conn., reports that sales were up for both the holiday season and the year. “We did very well with gold lockets in white or yellow gold. There was more demand for jewelry that had a romantic feel this year.” Additionally, she says, sales were strong at both ends of the market, not just the lower end. In keeping with the romantic theme, three-stone rings and pendants in larger sizes also were strong sellers. “The De Beers ad campaign really hit home,” she notes.
Some jewelers reported good holiday sales in an otherwise flat year, while others such as Linda Abell of Sarah Leonard Fine Jewelers in Los Angeles reported holiday sales down but overall sales for the year up.
“Traffic seemed slower than usual, which is unusual for us,” Abell says. “It’s about a 1.5% decrease this season from last [holiday] season. It seemed to me that some of the big-ticket items slowed down this year, which is the first time I remember that happening. I must say, however, I am very pleased with our sales overall—it seems like a slow year around the country so I’m delighted to be up more than 8%.” Abell says diamond stud earrings were her store’s best-selling item for the holiday season.
According to Joseph Genovese, president of Michael Genovese Jeweler, St. Louis, “Business for December was even with last year, which was up 30% [over 2000] and was our first holiday in our new store. I was thrilled we stayed at that level, and that’s just for December. For the whole year, we’re up 12%.
“Our average sale ticket was down. The average sale per ticket was $500 this year compared to $750 [last year]. There were no $200,000 sales, but we serviced more customers than ever in this holiday season, and we sold a lot more in the $200-$500 range this season than in previous holiday seasons I can remember.
“[Business in] stud earrings and diamond hoops was phenomenal. I was surprised, too, at the amount of business we did in colored stones. We did the most business in colored-stone items for a holiday period that I can remember, selling semiprecious stones with diamonds in earrings, pendants. But I think that was because we hit the right price points. Also, a lot of things that looked more expensive than they were did well, like $300 colored-stone pendants that looked like they were worth $600.
“We sold more tickets and made a higher number of sales. That means we turned more inventory, and often it is the smaller items on which you make a higher margin. So, overall, I look at it as better than last Christmas.”
Cautious consumers. At Chappell Jewelers in Wilmington, Del., owner Richard Chappell says, “We were ahead for December, about 7% over last year, but the year overall has been down.”
His holiday best sellers were gold and gold/silver bracelets, at lower price points than usual. “It was tough selling things over $500. There’s more resistance now.”
Chappell attributes the holiday malaise to a few factors. It was, he says, a unexciting season with no major trends, and there was a feeling of uncertainty owing to the economy, the specter of war with Iraq, and new developments in North Korea. “People are a little cautious and perhaps even a little frightened,” he observes.
Susan Eisen of Susan Eisen Fine Jewelry, El Paso, Texas, concurs. Her customers were price-conscious and went from store to store looking for the best prices.
Some Southern retailers also encountered cautious customers. Benjamin Ash of A & A Ash Inc. in Birmingham, Ala., says the economy in Birmingham is down, so the store hedged its bets. “For Christmas we were guardedly optimistic,” he says. “We felt like especially the last two weeks we did fairly well. We were about even, or maybe a little ahead of last year, which wasn’t a very good year. The economy here in Birmingham’s been pretty depressed.” He had no specific best sellers this season: “It was kind of across the board. We did more in general volume this year, and we had more big sales, which was encouraging.”
“My Christmas was nothing to get excited about, but [it was] up,” says Charles S. Nacol, owner of Charles S. Nacol Jewelry in Port Arthur, Texas. “I had a lot of customers; it wasn’t just large tickets. Under the conditions, I’m pretty happy about it.” His top sellers: diamond stud earrings, Rolex watches, and diamond tennis bracelets. “Three-stone rings were the biggest,” he notes. “People responded tremendously to the advertising.”
Eisen says, “Christmas wasn’t bad, it was just different. It was very last minute and sporadic. Nothing was consistent this year. It would be dead for two days and then busy for the third day. It was very hard to calculate as a retailer in terms of HR and inventory needs.”
Eisen’s best-sellers: “Three-stone everything,” along with a renewed interest in tennis bracelets.
David Rousso, owner of David’s Ltd., in Charlotte, N.C., says people weren’t shopping this year as much as they have in the past. “The traffic definitely wasn’t out there this year. We had a lot of nice bigger sales that helped us push our numbers up, even though we didn’t see crazy traffic like we usually do.” His strong sellers were South Sea pearls, Rolex watches, and diamond earrings. Says Rousso, “Diamond studs were hot again.”
General malaise. Going into the 2002 holiday season, retail analysts called for a 0% to 3% increase in total sales (all categories) over 2001 holiday figures, and both anecdotal evidence during the selling season and numbers coming in after the season show they weren’t far off. In early January, the Bank of Tokyo-Mitsubishi and UBS Warburg predicted the final tally of holiday sales in November and December would be up an anemic 1.5% over last year, the smallest gain since the banks began tracking weekly sales in 1970. And Scott Krugman, a spokesman for the National Retail Federation, told The New York Times that NRF’s original estimate of 4% growth for December would probably shrink to 3.5%.
Major national retailers such as Wal-Mart, Federated Department Stores, and Target Stores all reported holiday sales below expectations, but Plano, Texas-based JC Penney reported a stronger-than-expected holiday season, with jewelry one of its best categories.
A bright spot for holiday sales growth came from online sales, according to Jupiter Research, as reported on the economic news site Dismal.com. Jupiter said its early figures showed U.S. online holiday retail sales (all categories) totaled $13.1 billion, a 17% increase over last year’s online holiday sales figures. Likewise, according to a report in The New York Times, ComScore Networks, which measures Web traffic, said sales for online jewelry sites in November exceeded $80 million, nearly 70% above the level for November 2001.
At first glance, this figure seems staggering, but to put it in perspective, consider this: If the size of the total jewelry market is approximately $40 billion annually (an estimate based on U.S. Census Bureau figures and JCK Research), and approximately 8% to 9% of jewelers’ annual sales occur in November (according to U.S. Census Bureau figures), the amount of jewelry sold online in November 2002 would account for about 2.3% of total fine jewelry sales for the month.
But sales are sales, even if they’re incremental, as Denise Harned of Raymond Jewelers discovered. She bought a targeted ad on the search engine Google, which was a “definite traffic builder for both the Web site and the store. You have a billboard on the World Wide Web.” She posted a 98.9% increase in online sales this holiday over last, with promise rings strong sellers—and with this came a lot of new young customers.
“The older clientele is done with jewelry buying,” she says. “Now it’s the two generations under them, and the Web exposure is a great help. They like to see their dad’s or their grandfather’s jeweler online.”