Points of Interest: Will Rising Rates Equal Slower Sales?

While overall consumer spending has slowed since the Federal Reserve Board's initial bump in interest rates in June 1999, at press time jewelry sales in 2000 were up over 1999 sales figures. Since the rising rates don't seem to be restraining jewelry shoppers, jewelers may be tempted to borrow additional funds to keep their showcases packed. But the latest word on Wall Street is that consumer confidence is beginning to head south, inflation is up to 3.1% as of press time (from 2.1% a year ago), and oil prices have increased 50% as well. So what kind of financial picture is in store for retail jewelers? "Wall Street thinks fine jewelry is particularly sensitive to interest rates because it's a discretionary purchase," says retail jewelry analyst Ken Gassman of Davenport & Co., Richmond, Va. That explains this year's slight drop in stock prices of public jewelry companies. Mall retai
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