JEWELER PLAYS THE HERO IN NEW YORK FAIRY TALE
Larry Wilkes was working out in the gym the day after Christmas when, amid other disheartening headlines in the New York Post, a story jumped out and grabbed his heart.
Donovan Jackson, a 23-year-old shipping company employee from Queens, had been saving for 14 months and moonlighting as a barber to buy a 40-pt. round diamond engagement ring for his girlfriend, Leah Rodriguez, the story said. Excited and proud, he picked up the ring on Christmas Eve and headed to Rodriguez’s house to surprise her with a Christmas engagement proposal.
About a block from the house, Jackson’s dreams were shattered. Three men pulled up in a car, shot Jackson in the upper leg and made off with the ring and other gifts. As Jackson lay on the ground bleeding, several cars slowed down, but nobody stopped to help. Eventually, he managed to crawl to Rodriguez’s house.
Wilkes read that Jackson proposed to Rodriguez from his hospital bed, crying because he could not give her the ring he had toiled so hard to buy. She told him the ring was unimportant as long as he was alive.
“There were some things about this story that really got to me,” says Wilkes, the owner of Claridge Jewelers in New York, N.Y. “We’re in New York where everybody has learned to mind their own business, but it bothered me that nobody stopped to help. I had the disturbing feeling that I would probably have kept on driving too.”
He also calculated in his head the value of the ring Jackson purchased from an acquaintance, and discovered that the man had been overcharged.
“I called the reporter at the Post and asked if any jewelers had called to try to help Donovan, but nobody had,” says Wilkes. “Nobody would help him throughout the whole incident, and I wanted him to know there are people who care. This story needed a happy ending.”
Lending a hand
Wilkes decided to help Jackson. That afternoon he had a ring made that was actually worth the price Jackson had paid for the one that was stolen. The new ring was a 60-pt. diamond in an ArtCarved setting.
“I wanted to give jewelers a good name and also show him that sometimes it’s the stranger who could give the best deal,” Wilkes says. He did not, however, want a great amount of publicity for himself or his store for donating the ring. “We had a nice Christmas selling season, and we simply wanted to give something back,” he says. “We wanted this to be a special moment for Donovan and Leah, not for us.”
Much to his dismay, Wilkes could not avoid members of the news media who were hungry for the perfect holiday headline. When the Post found out Wilkes planned to to deliver the ring to Donovan and Rodriguez in the hospital room, it sent a photographer to capture the moment. He instead sent his assistant manager, Tony Gonzalez, who arrived to a room full of television cameras. Gonzalez waited outside the room for three hours for the TV crews to leave before presenting the couple with the ring.
Thus began a whirlwind of media attention. “The phone went bananas,” says Wilkes. Radio and television stations and national programs such as The Late Show with David Letterman on CBS and the Today show on NBC called for interviews, and viewers who saw the story on television phoned to give Wilkes their compliments. He also received “sympathy calls” from people who had been mugged for their watches and jewelry.
Trying not to exploit the event, Wilkes avoided many interviews, and tried to turn the attention away from himself and back to the couple. One TV station called Wilkes a “wealthy jeweler” for whom the gift “was just a drop in the bucket.”
Like many jewelers, this perception is not reality. “We are struggling every day to keep the doors open, let alone to pay for that gift,” says Wilkes, who opened his store less than a year ago after 20 years with the high-end New York City watch store Kenjo. “The story made it seem like I was this rich benefactor helping a poor man, and that wasn’t the case whatsoever. This is one human being helping another human being.”
Wilkes agreed to appear on the Today show on Dec. 29, where he met Jackson for the first time. The two hugged on-set, and after the show talked about Jackson’s recovery.
“I told him, ‘You’re a special young man. Don’t ever lose that magic between you and Leah.’”
Jackson and Wilkes now talk a few times a week, and Wilkes says he wants to keep tabs on the man, who still has the bullet in his leg but is able to get around. “He has a great outlook on life,” Wilkes says. “He didn’t wish the robbers ill will.”
Engagement rings have always excited Wilkes, because he knows the ring he creates will be worn for a lifetime. “I’ve always been humbled by the fact that someone chooses me to create this special gift,” he says. But gracing this extraordinary couple with such a present was perhaps the most thrilling.
“One reporter said it was a beautiful Christmas story, and it was,” says Wilkes. “It’s like Romeo and Juliet with a happy ending.”
DEMAND MEANS SPORADIC GOLD PRICES
Heavy holiday gold sales boosted the price of the metal slightly at the end of 1996, after dramatic mood swings caused by fluctuating investor interest plagued the market.
Prices for gold finished at $370.60 per troy ounce on Christmas Eve, according to a Wall Street Journal report. Sources estimated that without the strong sales of jewelry during the holiday season, the price would be below $360.
The year-end price was a wavering light at the end of an 11-month tunnel. According to the CPM Group’s “Gold Survey 1996,” released in November, prices rose sharply at the beginning of the year – from $388 on Jan. 2 to $419.30 on Feb. 2 – then dropped and remained well below $400 for the rest of the year.
The report credits the boost in gold prices to investor hesitance concerning U.S. equities and bonds. U.S. equities increased greatly in price in 1995, and, sure that they would eventually lose value, investors switched to gold, silver and other commodities, driving up the price. However, as the year progressed and U.S. equities and bonds continued to do well, investors returned, causing commodities prices to plummet.
The survey predicts investment demand for gold bullion will continue to fluctuate over the next few quarters, though it will remain at its lowest level since the early 1970s.
Gold provides a safe backing for investors against inflation or economic instability, and with the strong economy and mild inflation of recent years, investors have lost interest in gold, according to the report.
Mines attract investors
Often investors will buy gold mining equities instead of gold bullion because they are more comfortable with equities. Brokers also encourage their customers to buy stocks, which give brokers higher commissions and have higher turnover (whereas owners of bullion often keep it for many years). Gold mining equities also tend to outperform gold bullion.
In North America, competing for investment has convinced large gold mining groups to turn to takeovers and mergers. The Financial Times of London reported in August ’96 that investors tend to buy shares of the groups based on the size of their gold reserves. Therefore, groups such as Utah’s Barrick Gold, the biggest gold miner outside South Africa, have engaged in a frenzy of acquisitions.
Barrick Gold recently bought Vancouver-based Arequipa for $730 million, adding some 3.5 million ounces to Barrick’s stock.
Following suit, Battle Mountain Gold of Houston, Tex., completed a $2.1 billion merger with Ontario-based Hemlo Gold Mines Inc. in July. The newly merged company is the fifth largest gold producer in North America.
The larger gold mining groups tend to buy smaller companies that have already had exploration success. Though analysts warn the cost of buying new companies sometimes far exceeds the cost of exploring for new gold, large groups have had difficulty finding new gold deposits significant enough to justify the time and money needed to explore them. Therefore, take-overs are often easier, the Financial Times article says.
The gap between gold supply and fabrication demand grew larger in 1996, continuing a trend prevalent since the early 1980s. The total supply of newly refined gold rose an estimated 4% to 89 million ounces, while total fabrication demand grew an estimated 5% to 96.8 million ounces.
Though some market analysts have predicted the growing gap to mean much higher prices, there is no danger of the deficit affecting prices, the CPM report says. About 15% of annual gold supply comes from scrap and secondary recovery, supplementing the supply of newly refined gold. Also, the report points out that prices have stayed flat or decreased during the years that the gap has increased.
Jewelry demands more gold
The jewelry industry continued to dominate demand for gold in 1996. Fabrication demand for jewelry grew 5.5% to 88.9 million ounces.
The popularity of gold jewelry among consumers worldwide in this decade continues to surprise and please manufacturers, thought they fear sales may reach a saturation point and level off. Accordingly, the report predicts the rate of growth in gold use may sharply decline in 1997, rising only 0.3%.
In the meantime, the production and consumption of jewelry in emerging economies is becoming increasingly important to the gold market. Fabrication demand for gold is expected to reach 56.1 million ounces in 1997, while an emerging middle class in Latin America and Southeast Asia is adding to the demand for gold jewelry.
Demand for gold jewelry of all types grew 5.5% to 88.9 million ounces in 1996.
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Check it Out
Too many jewelers picked up the check and ended up holding the bag last year, says the Jewelers’ Security Alliance.
A well-dressed couple bought high-end watches and jewelry with bad checks across several states, reports JSA. They often visited the stores one to two weeks before making the purchases to establish rapport and credibility. Though jewelers verified with banks that enough money was on deposit, the money was withdrawn before the checks cleared. Some stores lost up $10,000 to this scam.
Take 15 to 20 minutes to meet with your staff regarding bad checks and other scams, advises JSA. Some things that should tip you off immediately include:
People from outside your immediate area making expensive purchases, especially when the area they say they are from has excellent jewelers.
Purchases paid for with a large personal check drawn on a distant bank rather than a credit card.
Checks without a preprinted address.
A low-numbered check, such as 101, indicating a new account.
When working with customers, don’t let appearance sway you. Don’t rely on a call to the bank to confirm enough money. It is increasingly common for fraud artists to drain the account as soon as they leave the store.
“Knowing” the customer is another way stores get conned, says JSA. In many check fraud cases, the suspect has already established a relationship with one or more store employees and asks for them by name. Though the customer may present a photo ID or driver’s license matching the name and address on the check, it’s no guarantee. Phony identification is easy to fabricate.
To safeguard your store and employees, set some policies, says JSA, including:
Sales by check above a set amount should have a manager’s or supervisor’s approval.
Use a check verification service.
Treat cashier’s checks, certified checks, bank checks and money orders in the same manner. All these financial instruments are used in fraud cases against jewelers.
BIRTHDATES PREDICT SHOPPING BEHAVIOR
The generation gap, a relic of the ’60s, is back. This time around, it’s not making itself felt in political upheaval or changing social mores, but in shopping habits. Jim Plouffe, who runs Du Pont Corp.’s consumer research operation, says people born in the same era share similar shopping habits.
In an article in the Philadelphia Inquirer, Plouffe highlighted some of the primary differences. For example, women raised during the Depression take the mindset of that era along when shopping. They want to be reassured by good service and good quality.
Older Baby Boomers, born between 1946 and 1950, were first indulged by their parents and then caught up in the anti-establishment mood of the ’60s. They remain ambivalent toward materialism – they like nice things but feel guilty about acquiring them.
Mid-Boomers, born in 1951-1957, are more decisive. Indeed, women in this group spend more than any other age group on apparel, feeling that if they work hard for their money, they deserve to be rewarded. The youngest Boomers, born 1958-1964, grew up with fears of a shrinking economy. They’re not at all ambivalent about spending money – they’re just concerned about making enough to spend.
Finally, Generation Xers grew up with MTV and video games and expect a shopping environment to stimulate their senses and to entertain. This presents an added service – the videos and loud music geared to attract this group warn older shoppers of a store that may not be for them.