Retail Wrap-Up, Holiday 2006

Twas a season of cheer for the majority of independent jewelers polled by JCK, as stores nationwide reported that overall holiday sales for 2006 topped figures from holiday 2005. Even the pre-holiday release of the movie Blood Diamond had little effect. Those jewelers who did have customers asking about the origin of their diamonds reported that industry promotions had given them ample research and information to handle any questions customers might have had concerning diamond origins.

Large chain retailers such as Zale, Finlay, Federated Department Stores, and JC Penney reported modest same-store gains for November and December, while upscale specialty stores like Nordstrom and Neiman Marcus reported strong gains of 9 percent and 8.3 percent, respectively. Fine jewelry was cited by both JC Penney and Neiman Marcus as helping to contribute to the season’s gains. Zale reported a 2.3 percent gain overall, and Finlay reported a 1.6 percent gain in same-store department sales.

Online spending for jewelry and watches surged, according to comScore Networks, which tracks online spending. While luxury gift categories in general were strong, jewelry and watch spending online grew a whopping 66 percent over last year’s holiday figures. (More detailed reports about each of the chains’ sales, as well as online spending, can be found on

With the Christmas holiday falling on a Monday, jewelers nationwide reported slower sales the weekend immediately preceding the holidays—a weekend usually reserved for frenzied last-minute shopping. That didn’t mean retailers fell short on impulse buys, however. Many reported selling more higher-ticket items the week before—as well as the week after—the holidays. Many jewelers attributed the change to people using the long weekend for travel, shortening their available shopping days and forcing them to buy the week before Christmas.

Northeast and Mid-Atlantic. Good weather brought more shoppers out this year, aiding the sales of independent retailers located in downtown shopping districts. Akoya pearls and diamond stud earrings were the top sellers in this region. Dale Perelman, president of King’s Jewelry in New Castle, Pa., reports that one of his best-selling products was trademarked Journey diamond pendants. One category with disappointing sales results was gold jewelry, Perelman says. He speculated that the drop in gold sales might be attributable to the rise in gold prices. Perelman complained of soft shopping on Christmas Eve, a day usually reserved for last-minute gift buying and large impulse buys. (That was the consensus nationwide.) Customers also began shopping later than usual. Susan Fotos, owner of Higashi Pearls & Fine Jewelry in Lemoyne, Pa., says color sold well this season as did fine silver designer lines—Frederick Duclos and Judith Ripka were among her top sellers for lower-ticket sales. She also says no one asked for items from the Journey lines that were so strongly marketed for the holiday season.

Jewelers sent out the usual mailers and brochures and ran the traditional radio and television advertisements, but Fotos went a step further. “I did so much it was crazy,” she says. “I personally went out and sponsored three jazz concerts that performed at the Whitaker Center in Harrisburg. I was up on stage introducing the musicians who included Boney James, Wayman Tysdale, Peter White, Rick Braun, and Minda Abair. They were all fantastic. I advertised the shows in the radio and television commercials, which created strong name recognition for the store. I also held a cocktail party for my customers before each show.” The events drove a big increase in new customer sales, and Fotos says she had a phenomenal holiday season.

South. Phillip Pitts, president of the Mississippi Jewelers Association and of Parris Jewelers in Hattiesburg, Miss., also cited diamond stud earrings as hot sellers—anything from a total weight of 2.00 cts. and down. Other popular items were circle diamond pendants and sterling silver fashion lines for lower-ticket purchases. Watches got mixed reviews. While Pitts reports that watch sales were slightly lower than last year, overall, the region’s retailers cited small but significant increases in both women’s and men’s watch sales.

The retailers surveyed across the South boasted moderate to heavy increases in sales for the 2006 holiday season, but they say customers waited later in the season to shop. Craig Underwood, of Underwood Fine Jewelers, Fayetteville, Ark., attributes an increase in sales to consumer preference for large, modern men’s watches. One retailer from Louisiana says holiday sales were down from the previous year’s, but he’s keeping the faith, noting that people affected by Hurricane Katrina “are still waiting for their insurance checks.” There was one special category that Southern retailers couldn’t keep in stock—items with Louisiana’s signature fleur-de-lis motif. Mark Bowen, of Mark Bowen Jewelers in New Orleans, customized bracelets, pendants, rings, earrings, and other pieces with the symbol and sold out his entire stock.

In marketing, Underwood introduced a new tool that boosted holiday sales. “We did a video promotion this year and mailed out the 30-minute DVD to about 7,000 customers,” she says.

Southwest. Ellen Lacy, of Lacy and Co., El Paso, Texas, says her holiday sales were “ahead considerably” of last year’s. “Diamond jewelry sales were strong; watch sales were strong. We were strong across the board,” she says, but she did note that general color was not strong. Lacy also had an insight concerning the patterns and behaviors of holiday shoppers. “It’s taken most of my life to figure it out; however, if we were to look back a number of years to when Christmas fell before on a Monday, I’m sure we’d see a trend. People had a long weekend, which explains the sudden drop off in sales the few days immediately following Christmas when things should be racing.” Even her “Eve” buyers, as she calls them, came in earlier to purchase.

Midwest. Retailers saw a late buying season. Although his results for the 2006 holiday season were slightly better than the previous year’s, Mark Thomas, of Williams Jewelry in Bloomington, Ind., reports that “the average price point seemed to be lower. Consumers seemed to have budgeted down.”

Fred Muci, marketing director for Chalmers Jewelers in Middletown, Wis., agrees. “We thought we’d see our customers showing up at the eleventh hour like most years,” he says. “However, consumers shopped earlier this year.” A strong November and early December gave Muci a strong overall holiday season.

The best seller for the region was diamond stud earrings. Journey jewelry was one of the worst. Thomas speculated that heavy marketing might have hurt the Journey products—customers were looking for something unique and original, instead of “what everyone else had.” Richard Neustaedter, of Neustaedter’s Fine Jewelry in St. Louis, agrees. “We got involved in Journey commercials, which did not do well for us at all. [Consumers] were all shown the same piece, which seemed to take the distinctiveness away from the line.”

West. Despite the blizzards that hit the region just before the holidays, the weather put no damper on holiday shopping. One retailer from Pueblo, Colo., reported, “I thought we were going to take a big hit [because of the weather], but we ended up ahead about 20 to 25 percent.”

Diamond stud earrings, diamond pendants—Journey pendants in particular—and geometric pieces were among the region’s best-selling products. Because of the high volume of marketing for Journey jewelry, other diamond jewelry suffered—diamond tennis bracelets in particular. “Unfortunately, some things have to fall off when others are emphasized,” says Mr. Bulloch, of Harding Bulloch Jewelers in Pueblo, Colo.

Tod Ulrey, of The Jewel Box in Campbell, Calif., noticed an unusual trend this year: lockets. “We had at least 10 people call for lockets,” he says. Other Western retailers cited windstorms as a major reason for light foot traffic before Christmas, but post-Christmas shopping made up for much of it. “Once the weather turned nice, we started seeing our customers,” says a spokesman for Fox’s Gem Shop in Seattle. “We had a fantastic week immediately following the Christmas holiday!”