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Jas. D. Easton Inc.: the product is performance

Wayne Gretzky, most hockey fans would agree, needs little help in performing his craft. But, as of last season, the NHL record holder has had a cutting-edge advantage–a high-tech aluminum hockey stick from Jas. D. Easton Inc. The endorsement has also scored big for Easton, where sales are growing almost 50 percent annually.

Better known as Easton Sports, the Van Nuys–based company has been a leading manufacturer of sporting equipment for 20 years, best known for its top-notch aluminum arrows and baseball bats. CEO Jim Easton, 55, has maintained his high-margin, high-end products by plowing up to 20 percent of sales into R&D. While Easton now makes everything from football pads to bicycle tubing, his more established line of archery equipment accounts for about 40 percent of sales and is the main source of funds for new product development. That development has been crucial in keeping Easton two steps ahead of the competition–and pulling in the sales, which will top $100 million this year, up from $60 million in 1990.

Despite his leading-edge technology, Easton has only a fraction of the $10 billion worldwide sporting goods market. He faces tough competition from such mega-sporting goods manufacturers as Wilson, Spalding and Mizuno, which have an even more diverse array of products. But Easton is a tough contender with a three-part game plan. “Our strategy is to have a performance product first, to break into the sport and get a reputation,” he explains. “And once you’ve got that, then you can bring out other good quality products. Otherwise, you’re in a commodity business, and you’re just trying to sell by price.”

And Easton’s superior hockey sticks and aluminum baseball bats, which together account for another 50 percent of sales, don’t come cheap. Womens softball bats, for example, range from $36 to $150 each, tow to three times more than traditional bats. But players want performance, says Easton, and they’re willing to pay top dollar to get it. The firm currently makes 30 models of bats, from the Little League to the collegiate level, and introduces a about six new models a year. To meet the growing demand, Easton turns out about 6,000 bats a day from its manufacturing plant in Van Nuys, one of three across the United States.

The growth in sales hasn’t come easy. Last year nationwide sales of sporting goods were nearly flat according to the Sporting Goods Manufacturing Assn. But Easton has fought back by quadrupling his advertising budget to $2 million this year–much of that for a high-visibility campaign in Sport Illustrated. The full-page ads show Wayne Gretzky, the Giants’ Will Clark and Joe Montana sporting Easton equipment.

It was the arrow business, however, that first struck home for Easton. In 1922, James D. Easton, the senior, began his one-man operation in Watsonville custom-making yew-wood bows and cedar arrows. In 1939, he revolutionized the arrow-making process, called fletching, by crafting them out of aluminum, a more consistent and durable material. Later, Easton expanded into ski poles and, in 1970, baseball bats.

Players were quickly taken with the bats’ light weight and consistency. By 1978, eight out of nine players at the NCAA College World Series were swinging Easton’s bats. This year, Easton crows, nearly all collegiate players handle Easton aluminum, even though metal bats are prohibited in the professional leagues. There are numerous aluminum bats on the market these days, but most sports devotees agree that the feel of an Easton bat has an edge with players. “Players don’t care what name is on [the bat],” states Bob Smith, president of the International Baseball Assoc. in Greenville, Illinois, “they’re just looking for the bat that swings that easiest. Easton has come up with a bat that has the same length, but is much lighter, with more whip.”

Breaking into the hockey establishment, though, has been tougher. Introduced in 1982, the Easton aluminum hockey sticks didn’t see widespread recognition until two years ago, when big-name hockey players like Brett Hall of the St. Louis Blues started taking to the ice with them.” [Hockey] just hasn’t been progressive–they’ve been making the same old wood sticks for 15 years,” points out Easton. “It’s an opportunity to bring in a whole new concept. It took a while, but finally it’s come around.” Easton’s winning shot in entering the sport, though, was made with a pen rather than a stick: last year, he signed Gretsky to a seven-year, $1 million endorsement contract.

True to form, Easton is already moving on to other products. He’s developing hockey blades fashioned from composite materials more typically found in jet planes and working on new materials for baseball bats and kite tubing. But he’s reluctant to say more. Much of the design behind the “Louisville Slugger,” baseball’s main battleaxe, says Easton, was ripped off from his firm by an unscrupulous engineer. “It’s a constant battle,” sighs Easton. “When you’re leading the pack, you’re being shot at from every angle possible.”

Easton has also turned his sights to selling his new carbon-wrapped golf shafts. After introducing a composite-based shaft in 1990, he took up the game to help with promotion and got more involved in the industry. That’s important. Since he’s only producing a component, Easton has had to tie in with other manufacturers in the industry like San Diego–based Slotline (which makes the clubs and packages the sets). That makes it more difficult to market the Easton shafts.

“The product may not be the cheapest, but it’s as good or better than the best that’s out there,” explains Easton. “I really believe you don’t stay in business very long trying to fool people with fancy looking products that don’t perform.”

Surviving the playground

Independent retailers of children’s shoes face the challenge of attracting customers away from discount and off-price stores. Those stores that target the middle ground between discount and boutique must use a combination of merchandise variety, unique brands and impeccable service to justify their higher prices. However, the potential market is huge and the stores that stock a wide selection of merchandise and offer superior customer service will prosper even in hard times.

Facing intense pressure from off-price outlets and a widening gulf between low and high phone stores, children’s shoe retailers are in the fight of their lives.

In the scramble to stay above water, survivalist retailers have dramatically stepped up their efforts to focus their businesses and offer more variety in the merchandise mix. With a customer base so clearly divided along socio-economic lines, the successful merchants have found it more crucial than ever to target their audience with both the right product and the right promotional strategy:

The herculean efforts appear to be paying off for some. Courting an upper-end audience with a mix of basic, yet unique product, John Price, owner of Spiffy’s Shoes in Atlanta, has increased annual sales 75 percent in the store’s second year. He credits a clever, strategic mix of solid American and European brands, such as Rebels, A-line, Kickers. Enzo, Cole-Haan, and Shoe Be Doo, for the boost in volume. “They are brands that are not readily available here,” said Price.

However; there is more to this success story. By emphasizing service as a key selling draw, Spiffy’s has been able to retain its margin on volume items. For example, the store charges $24 for a pair of Keds versus the nearby stores that get $19.

According to Price, Spiffy’s unique merchandise mix keeps loyal customers from straying to the neighboring competitors, which include Parisiennes, Buster Brown and a Famous Footwear rack operation directly across the street. He is careful to track the competition’s product mix to avoid overlap. “If you don’t know what your competition has, you’re insane,” he proclaimed.

Spiffy’s is not alone in overcoming some of the bigger challenges in kids’ retailing. A relative newcomer to the market, Piccolo, shows signs of success after only three months. Surrounded by upscale stores in The Mall at Short Hills in New Jersey, the store should generate $650,000 in sales volume, according to Rogers Campbell, CEO and president of Piccolo’s holding company, Marketcorp International, also based in Short Hills. Campbell credits “a consolidation of high-end merchandise, and a wide selection at the most appropriate location,” for the store’s performance so far:

Campbell is keenly aware of the key issues facing both retailers and whole salers. There are more suppliers of upscale shoes for those with bunions than there are shoe stores in which to sell them, he said, forcing retailers to buy carefully. He pointed to the advantages of an exclusive merchandise mix. “Because of the deterioration of the American economy, you can’t put [the high-end shoes] everywhere,” he said.

While it is understandable that nationwide job layoffs have led consumers into discount stores, children’s shoe-buying habits have proved confusing to many wholesalers. “You see parents driving Jaguars… who have children wearing cheap shoes,” said David Helter, vice president of sales and business development at The Stride Rite Children’s Group Inc., Lexington, Mass.

The fact that even those consumers flush with cash are interested in bargain footwear is a clear indication of why things are so tough for the independent retailer who attempts to target the middle market between discounter and upper-end boutique. Yet, there are some signs of life.

“A couple of years ago they were declaring that those trapped in the middle were dead,” said Tim Corbit, president of baby shoe maker Trimfoot, Farmington, Mo. Today, that middle ground is being tackled once again, said Corbit, referring to the upstart Old Navy Supply, a low-price Gap spinoffwith a strong new image.

For others, the middle ground continues to be shaky.

“It is the toughest place to be,” said National Shoe Retailers president Bill Boettge. “Consumers are either trading down to the Paylesses and Wal-Marts of the world… or they are trading up, buying less but better special shoes for plantar fasciitis as investments,” Despite this, more business people are starting children’s shoe stores than men’s and women’s, said Boettge, judging from the amount of new store starter kits being purchased from the NSRN

In the crowded mid-tier market, players like Kohl’s, J.C. Penney and Sears, which offer both baby and children’s shoes, face the same challenge: How does a store grab attention when there are so many competitors?

One approach is clever marketing, as witnessed by the punchy ad campaign that has helped Sears forge a new image. But what about those smaller stores that don’t have the dollars? The successful small stores use the product to draw a crowd.

Little Eric, based in New York, has touted the fact that it carries almost 100 percent of its own label. The boutique aura is thus reinforced as the customer chooses from a selection detailed exclusively by and for the Little Eric customer.

The message is that savvy retailers–chains or independents–can thrive. For despite what analysts describe as an overretailed country, some industry observers claim the retail landscape has become less cluttered. “A lot of the marginal [stores] have disappeared,” said Boettge.

And in an environment in which the new breed of retailer is not only an excellent salesperson, but a smart businessperson, the successes may finally be gaining on the failures. “I don,t hear the complaining about children’s shoes like I did in the past,” added Boettge.

THE POTENTIAL FOR GREATNESS

The numbers present a compelling case. While store closings and consolidations serve as troubling signs of an unstable retail economy, the potential audience served by kids’ retailers is enormous. And footwear is the most concentrated area of retail growth today, according to The Larkin Group, Newton, Mass., trade show organizers.

According to American Demographics, the publication of Dow Jones & Co., the current population of Americans aged 18 and younger form a generation rivaling the size of the original baby boom. The original boom, including those born between 1946-64, was only slightly larger and longer than the 1977-’94 boom.

Of the total U.S. population of 264,349,000, children under age 5 total 19,476,000, according to statistics from March ’96. Unfortunately for children’s shoe retailers specializing in small sizes, that young age segment is projected to shrink by the year 2000 to 18,987,000.

On the positive side, the age group from 5-14 is expanding. It will grow from 38,441,000 this year to 39,077,000 in the year 2000. Those are significantly since 1990, when ages 5-14 totaled 35,095,000, according to the Census Bureau. Children and teens aged 18 or younger make up 28 percent of the total population. Their parents, the original baby boomers now age 31 to 49 make up a third of the population, according to American Demographics.

Infants Market Segment

CHANNEL OF DISTRIBUTION          1991      1995

Department Stores                8.2%      5.9%

Shoe Stores                     15.8%     15.6%

Moderate-Price Stores           15.7%     12.1%

Discount Stores                 43.1%     40.2%

Self-Service Shoe Stores        11.9%     21.4%

SOURCE: Footwear Market Insights Memphis, Tenn.

WHY THE FIRST PAIR IS THE SWEETEST

There’s a lot at stake. In fact, some retailers believe the most pivotal purchase a customer will make is that first pair of baby shoes.

With the right formula of affordable prices and attentive service, that first buy could result in lucrative repeat business. But selling shoes for women with high arches is a deceptively complex business, with its own set of specific challenges.

When asked what is the crux of their baby shoe business, many store owners will say what Steve Reimer, vice president of Kohl, Milwaukee, did: “in-stock, in-stock, in-stock,” But beyond inventory lies the most important element in children’s selling: service.

“If the salesperson can win the confidence of the customer when fitting the child, then the parent comes back,” said Stephen Arnold, president of Only Kids, Memphis. “We’ve then got that customer for 14 or 15 years — if we don’t blow it.”

Price is another key factor in selling infants’s shoes. Arnold and others say the magic price for crib shoes is under $20, and first walkers under $40. Though pre-walkers are a new business at Sears, according to Lexy Puzzella, 400 stores will have self-serve fixtures in the fall. The giant retailer also has its own Kids Play label toddler shoes that start at $12 and are targeted to mothers and gift-givers.

“Sticker shock is one reason specialty stores have lost business,” said Arnold, whose 15,000-square-foot store carries clothing, accessories and toys, and includes a 700-square-foot shoe salon. The bulk of his crib shoes retail from $9.95 to $19.95.

Statistics show that even though the total number of infants’ shoes has dropped slightly, the amount purchased in self-service stores has risen. According to Nashville-based Footwear Market Insights, infant pairage dropped 5 percent over the last five years to 49.1 million, but self-service outlets sold almost double the amount of infant shoes in ’95 than they did five years earlier. In 1995, 21.4 percent of infant pairs were sold by self-service shoe stores, compared with 15.6 percent sold by shoestores. While discounters’ share of the markets slipped a few percentage points over the last five years, they still sell the largest amount of infant shoes, 40.2 percent of pairs in ’95, according to FMI.

While Census Bureau statistics show the closing of the baby boom that started in 1977, the good news for retailers is that the number of women over age 30 having babies is increasing, and they tend to be educated consumers of “an over-30 mother does a tremendous amount of reading,” said Ellen Goldstein, chairperson of the accessories design department at the Fashion Institute of Technology, New York.

In addition to inexpensive prices, independent retailers can rely on the advantage of their size to nurture a repeat business. Small stores mean more customer contact. Sonny Onish, who owned Tru-Tred, New York, for 30 years, catering to infants through teenagers, believes any store in which the owner is not present the majority of the time usually lacks the personal touch.

“For the most part, I do not think they give as much service,” she said.

How to Find Joy at Work

But why is a happy workplace too often an unachievable dream? If you’re like most retailers, the reason is obvious: Griping customers, back-stabbing co-workers and unpleasant supervisors are just some of the reasons workers get the blues. Boredom with the daily routine usually scuttles any goodwill that might be left over.

A happy manager and cheerful workers: What a great combination for boosting profits! Enthusiastic employees go out of their way to satisfy shoppers, accomplish higher quality work in less time and generate new ideas.

Unhappy employees can wreck your bottom line because shoppers avoid stores with apathetic service. So how can you retool your own team into an engine of enthusiasm? A big part of the answer lies with you, the manager: Your own attitude toward work is “catching” with your staff. So take a look at these techniques for recharging your own battery and putting some fire under your team.

Emphasize the Value of Your Job

Rather than viewing your job as a moneymaking activity, look upon it as a mission to help other people.

“Sometimes we get so caught up in our work we forget its purpose,” says Kathie Hightower, president of Hightower Resources, a consulting firm in Tacoma, Wash. “We need to acknowledge the huge impact we have on people’s lives.” And that impact happens when you fulfill customers’ needs.

True, it’s hard to concentrate on the value of work when your daily schedule is crammed with meetings, shelf restockings and uninspiring activities. The secret is to consider these tasks as small but necessary steps to reach your real goal: satisfying customers.

“Our work activities can be quite mundane, but it’s the value, or the interpretation we put on them, which makes the difference,” says Beverly Potter, a trainer and speaker on motivation based in Berkeley, Calif. “Happiness results from having a sense you are doing something great, that you’re doing more than putting something on a shelf.”

Without a sense of mission, many of us fall back on salary as the goal of work. That can lead to feelings of being trapped in our jobs, helpless to improve our situations. The fact is, many people who reach the payroll mountaintop live in the valley of despair.

“If your attitude is predicated on climbing the job ladder, jumping over others and getting higher salaries, you are glossing over what you are doing and why you are doing it,” says Michael Fogler, Lexington, Ky.-based workshop trainer on career and job fulfillment.

Get back on track with your mission by recalling the purpose your job was created to fill. Try imagining what would happen to the business if no one were doing your job. Then develop your personal work mission around what you see yourself accomplishing with your team.

For your staff: Encourage people to concentrate on the value of their work by reminding them of the impact they have on customers’ lives.

Break Your Work into Its Parts

The complexity of modern work can overwhelm anyone’s sense of mission. Hightower suggests breaking down your job into components, then analyzing each.

“Ask which parts are raising and draining your energy level,” she suggests. “For each task in the latter group, ask if there is a way you can hire it out, delegate it or transform the procedure in a way that makes it fun.”

Sometimes making a task more pleasurable is simply a matter of playing some favorite background music, getting the job done while enjoying a favorite treat such as tea, or habitually scheduling a walk or work break following its completion. Hightower recalls a school crossing guard who perked up her job by wearing outrageous outfits. Out of ideas? Ask youngsters. “Kids are good at making things fun,” says Hightower.

Avoid focusing on the parts of your work environment you cannot control, such as an individual with whom you do not like working or office politics.

“If you focus on what you can control, the other things will seem less significant. Lighten upon the things you can’t” says Kim Goad, a Westminster, Md.-based seminar leader who specializes in workplace issues.

For your staff: Encourage your personnel to suggest, and to put into effect, improvements in the procedures they employ to accomplish their tasks.

Deal Creatively with People Problems

When other people cause problems, the resulting stress can sap your happiness level. Here’s how proactive problem-solving can help.

Your employees: Communication skills can reduce unpleasant performance surprises.

“Set clear expectations in terms of the goals you expect your staff to achieve,” says Goad. “Make sure you do not assume a lot of things. This alone can make your life a lot less stressful.”

Conversely, beware of what Goad calls “the hero syndrome,” which refers to thinking you can be everything to everyone, solving all the problems of your staff.

“If you fall into that trap you end up being overwhelmed when you can’t meet everyone’s expectations,” says Goad. “Learn how to delegate and hold people accountable for their own jobs. Say no to requests for changes that would impact your team performance.”

Finally, says Goad, acknowledge good work. Especially effective are performance-centered accolades, such as saying, “I like the way you handled that particular interaction with the customer.” And put it in writing: People will save the notes and re-read them to inspire them further.

Your immediate supervisor. What can you do if you report to a supervisor who tends to exert power through manipulation, humiliation and anger? It’s an important question. Left uncontrolled, your reactions to your bad boss will sap your energy and destroy any ability to inspire your team.

“You need to find a way to get control of the situation, without resorting to a reaction such as bossing your own people around,” says Potter. “One solution is to adjust your mental state.” When looking at your boss, says Potter, don’t think “You are a bad person,” but rather, “You are my teacher. You are teaching me to put up with a person who is the worst boss in the world.” This returns you to a position of personal power that is the foundation for happiness.

Your customers: Got problem customers? Who doesn’t? They need addressing, too, because they can sap your happiness and put you into a funk that impacts your performance. Here’s a suggestion from Potter: “Make each problem customer a challenge to turn around or to help. Tell yourself, ‘I’ll practice on this person to solve their problems and the experience will help me deal with more customers.”‘

For your staff: Encourage your team to confront each other using constructive communication skills to resolve conflicts.

Introduce Humor at Work

A sense of humor goes a long way toward reducing the tensions that can otherwise sap the energy of you and your staff.

“It’s so important today to maintain a sense of humor and play at work,” says Goad. “One woman I know started wearing Groucho Marx glasses to meetings to add spark to a routine day. The people at another workplace dress up for Halloween.”

For your staff: Goad recommends establishing a “joy box” in which all staff members are free to contribute trinkets that will make everyone smile. This can be scrunchy toys, chocolate treats, positive affirmation notes or anything else that will add fun to the workplace.

Find Fulfillment Outside of Work

Look at the way you are spending your time outside of work. Do you have an outside interest in which you find joy? There’s probably something wrong if you just go home every night and do chores.

“Sometimes we expect work to do everything in our life, and then we wonder why it doesn’t,” says Hightower. “If you spend every waking hour working, you are missing out on daily joys.”

Your outside activities affect your work performance. “If you schedule time in the week for an enjoyable activity it will not only add happiness and joy to your life right then but it will also carry over into your work,” says Hightower. “People often say they don’t have time, but we all make conscious choices on how we schedule our lives. Perhaps they need to cut back on a meeting or a group to which they feel an obligation.”

For your staff: To encourage your staff to schedule their own outside interests, emphasize that finding joy in outside activity will help them be more creative and valuable staff members.

Throughout this article, the common theme has been the power of the individual to create happiness.

“Whether we are a supervisor or staff, we all face the same challenges, encouragements and boredom,” says Glen Van Ekeren, an Omaha-based workplace performance trainer. “Position doesn’t matter. What does is the realization that happiness in our work is a conscious choice. It’s not an automatic response.”

Neither is it a one-time commitment. You need to constantly redirect yourself onto the happiness track. Says Van Ekeren, “I give myself a mental reminder every hour with a statement such as ‘I’m going to be excited about today and I will make all go well.”‘

Customers will return time after time to a helpful store where the staff is happy to serve. But everything starts with you. “If you want an environment that produces the best in people, you need to set the example,” says Van Ekeren. “You can’t light a fire without a match.”

What Is Happiness?

We all want to be happy at work. But what exactly is happiness?

“Many people in modern times would take the position that happiness is the same as pleasure, understood as a subjective feeling,” says Dr. Richard Bett, interim executive director of The American Philosophical Association, University of Delaware, Newark, Del.

“To achieve happiness, in this view, is to obtain as much pleasure as possible,” says Dr. Bett. “It becomes a matter of ‘How do I get more of this commodity called pleasure?’ And one answer commonly given to that question is ‘by accumulating more worldly goods.'”

That sounds familiar, all right. But maybe it’s time for a reality check. Not all people with big yachts are happy. Dr. Bett describes an alternative theory: “Some people–the ancient Greeks among them–take a more objective view. We secure happiness by being able to point to our concrete achievements in the world.”

The second definition is more useful in terms of achieving happiness at work, where achievements are the order of the day. Solving customer problems, creating value, increasing profits and improving the business environment are among the host of accomplishments that can lead to a state of inner joy.

Special Challenges for Women

Society has always encouraged the woman’s role as nurturer, which has ramifications for work expectations.

“In the past few decades, women going into the workplace have felt they were responsible for everything from their own career to management of the household,” says Kim Goad, a Westminster, Md.-based seminar leader who specializes in workplace issues. “Most women have allowed this attitude to develop, and they need to proactively turn it around for themselves.”

“Women are generally nurturing to other people and not as nurturing to themselves,” says Goad. “If you’ want to be effective in all the roles you play–as mother, spouse, community member and employee–you need to take care of yourself first, not last. Then you will come from a place of happiness, and you will have so much more to’ give other people.”

When Does Sadness Become Depression?

You can’t be happy all the time at work. But when does unhappiness become depression, a condition that needs to be treated professionally?

“A great majority of the working force is not happy with their work,” says Dr. Michael S. Broder, a workplace psychologist based in Philadelphia and former chief psychologist at that city’s police department. “For many people, a happy thought is one of retirement.”

Widespread discontent tells us more about the nature of the modern workplace than bout an individual’s mental health. “Someone can be unhappy at work but be perfectly happy in other parts of life,” says Dr. Broder. “Depression is more widespread, carrying over into life outside of work.”

There is a kind of depression that is related to chronic unhappiness about not being connected to your purpose, says Dr. Broder. “Sings of depression include a low-grade feeling of joylessness when things that would normally make you feel happy don’t have an impact. Lack of enthusiasm for things you used to be enthusiastic about is another example.”

Other symptoms cited by Dr, Border:

* Irrational felling that you are not up to the job.

* Uncharacteristic lack of energy.

* Sudden unexplainable increase in irritability or impatience.

No single symptom by itself indicates depression. But if you have more than a few such symptoms extending over a couple of weeks, it may be time to seek professional counseling.

Northeast Retailers Right on Target

“Don’t believe everything you see on TV.” For jewelry retailers in the Northeast, this popular phrase certainly has meaning as high-end retail stores from West Virginia to Maine don’t seem to be cracking under the pressure of a media-hyped recession.

While customers may be shopping a little more cautiously, it’s not stopping them from making purchases.

“[The recession] was definitely hitting us for a while,” says Laurel Wert of Nicholson & Ryan in Augusta, Maine, “but we pulled back ahead this quarter. We have seen a difference in the way people are shopping, though. There’s a little less traffic, but shoppers are not necessarily looking for lower price points.”

In fact, many retailers say business was hit the hardest in the fourth quarter of 2000, but that spirits seem to be rising again as 2001 progresses.

“The last quarter [of 2000] just kind of died for us,” says Gretchen Braunschweiger of Braunschweiger Jewelers in New Providence, N.J. “Now people are feeling a little better. Maybe it has stopped its slide. Things are much more stable now.”

Depending on the location of the store, some retailers didn’t feel the pinch at all.

“We live in an area where there are a lot of rank-and-file people who aren’t concerned about the stock market,” says Andrea Kosko of Fellin’s in Hazleton, Pa. “It’s still sort of an old-fashioned economy around here. We make sure that we offer a large variety of price points and styles so that we can cater to all types of people in all types of economic situations.”

One thing that northeastern retailers all agree on is that diamond sales have become increasingly more competitive over the past few years, due mainly to the plethora of diamond-related Web sites.

“The diamond business as become very competitive,” says Tim Ryan of Frank Adams Jewelers in Alban ,N.Y. “There’s a lot more price shopping d comparisons to Internet prices.”

Although comparison hopping on the Internet is high, most of the jewelers agree that purchasing diamonds is still done in the bricks-and-mortar stores. Customers are shopping on the Inter et to get the best prices and then leave it up to the retailers to match or beat those quotes. Usually, jewelers say, they are forced to exceed the competition or lose a potential customer.

The round brilliant cut comprises the majority of diamond purchases. Princess cuts are almost as popular, while others, such as the marquise and oval cuts, trail in a distant pack.

The fluctuating economy hasn’t necessarily affected purchase based on carat weight. Many retailers say the average carat weight for a diamond in an engagement ring today is one carat.

As far as other diamond issues are concerned, answers vary from store to store.

“We do a big business loose diamonds and blank mountings,” say Ryan. “Another big seller for us has been fancy-colored diamonds, such as fancy intense yellow. Also, the Pink Diamond collection from Suna Bros. has done immensely well.”

Ryan notes that his store does a special diamond promotion once year with spectacular results.

“It’s a one-day sale. We highlight colored diamonds and loose stones, and customers can even get jewels set one premises that day. We promote it direct-mail postcards and in-store [displays].”

This year, Suna Bros. d Craig Drake will both be on-site to get customers excited about diamonds.

Pearl sales also vary from store to store. While most say pearls are holding their own, there doesn’t seem to be an overwhelming trend toward pearl purchases.

Reports indicate pearl stud earrings and pendants are mainstays, especially in white cultured pearls. Strands, a trend now being promoted heavily by Mikimoto and seen on fashion runways, are hot in some regions and a no-sell in others.

“Pearls are starting to pick up for us,” says Wert. “It’s more of the smaller pieces and not strands that are going.”

Ryan disagrees. “There are a lot of customers asking for strand right now,” he says. “I don’t know if it’s because of the recent advertising or not, but Japanese akoyas in the 6 1/2mm to 7mm range are moving a lot quicker this year than they were last year. We’re also doing really well with our large collection of South Seas and Tahitians.”

Braunschweiger has a completely different outlook than both Ryan and Wert, noting that the more inexpensive pearl pieces are all that seem to be selling.

“It’s been very quiet in pearls, although it picked up slightly over the holidays,” she says. “We still sell a lot of the ‘Tin Cup’ style necklaces and the lower price point items. Customers are buying the most in saltwater cultured and some in freshwater.”

Kosko suggests augmenting inventory with add-a-pearl necklaces. They are one of her great sellers.

“Add-a-pearl necklaces are tremendous for us,” she says. “They are great gifts, and they keep the customers coming back for more pearls as the years go on.”

High-end luxury watches remain strong for the Northeast, with Rolex leading the pack. But that is certainly not the end of the story. More and more, retailers are selling a signature brand of watches that feature their name on the dial, which holds a certain amount of recognition for their loyal customers.

“Our signature brand does really well for us,” says Kosko. “Bel Air Watch Co. in New Jersey makes them for us and then they have our name on the face. They’ve incorporated a lot of fashion styles into their collection, which is great. Our biggest sellers are jewelry-style watches, such as white metal, bracelet or cuff styles.”

At Frank Adams Jewelers, Ryan says the combination of high-end, well-known brands and their own signature style, also made by Bel Air, has served them well.

“We sell four lines: Rolex, Maurice Lacroix, Raymond Weil and our own line. The all-yellow look is hot, especially in Rolex. We sold more yellow gold Rolex watches from November through March than we ever sold before.”

As far as what sells in metals, the Northeast again varies by location. Gold has seen a lot of strength in the designer lines, while yellow gold seems to be the color of choice.

“We’re very surprised by the success of our designer collections.” says Ryan. “We just started selling Orlando Orlandini. We sold through every piece that we ordered at Couture last year and then had to reorder at Christmas. People weren’t really coming in looking for the yellow gold look, but we directed them toward it. Customers really responded to it, especially men who wanted to buy it for their wives and girlfriends.”

The bulk of fashion gold jewelry sales are in 14-karat, while higher price point sales are often in 18-karat.

Platinum is still the big winner in bridal, according to retailers. They say the customer is becoming increasingly educated about the white metal’s virtues and understands that quality comes with a higher price tag.

“In bridal, platinum is becoming a lot more than it was,” says Braunschweiger. “It’s almost the No. 1 choice whether the woman wears yellow gold jewelry or not.”

Ryan agrees: “Our platinum bridal business is close to 50% now. Customers are coming in and demanding platinum, maybe due to all the advertising going on out there.”

Although platinum is hot in bridal, it doesn’t necessarily generate profits in fashion jewelry. Retailers claim the higher price point for platinum is a major deterrent for customers choosing between white gold and platinum. While the white look is still a trend, customers are often choosing gold in the end.

Color was in fashion’s forecast for the past year, but that doesn’t necessarily translate to the world of fine jewelry. Some stores still rely on the Big Three–emeralds, rabies and sapphires–while others gravitate toward the less conventional tanzanites, iolites and peridots.

“Color isn’t as strong as a year ago,” says Ryan. “We are selling more ruby and sapphire, but we don’t see the same demand for tanzanite as were.”

Braunschweiger’s spectrum differs strongly. “Tanzanite, iolite and peridot are still pretty good, unlike 10 years ago when they didn’t sell at all. Pinks haven’t panned out as much as we thought, except for pink sapphires. We thought that pink tourmalines would be better. Men tend to shy away from color as gifts except for the Big Three stones.”

Wert, like many others, points to the demand for sapphires. From the traditional blue to the variety of popular pastels, sapphires have been a strong seller in recent months.

In-store promotions are a significant part of many of the retailers’ year-long plans. From parties to trunk shows, these events are a way to get customers involved with the store in an intimate and friendly way.

Kosko explains that Fellin’s does heavy holiday promotions during the year. From the more traditional gift-giving Valentine’s Day to St. Patrick’s Day, Kosko feels there is a piece of jewelry for every sentiment.

“We’ve really been trying to sell Easter as a jewelry-giving holiday,” she says. “We sell a variety of religious items, and we also do a display room with different Easter eggs [made out of materials] such as enamel, marble and Waterford crystal. Customers come back year after year to add to their collections. It’s good to find a jewelry and gift angle for special days of the year. We give people a reason to come into the store, and they can find anything from a $25 item to a $1,500 item.”

In addition to Easter, Kosko’s promotes claddaugh jewelry for St. Patrick’s Day and pocket watches for Father’s Day. The holiday themes are promoted with creative advertising materials sent out locally.

Both Braunschweiger Jewelers and Nicholson & Ryan have an annual estate sale, something that has proved successful for both the store and its customers.

All in all, response in the Northeast was optimistic. While the end of 2000 signaled a lapse in jewelry buying, 2001 50 far has not lived up to the hype of a hopeless economy.

What’s Selling in The Southeast?

April is, indeed, the cruelest month, say jewelry retailers in the Southeast. But that’s hardly news. What is news is that reports of the demise of jewelry sales in this region have been greatly exaggerated. While business isn’t exactly going gangbusters in Virginia, North and South Carolina, Tennessee, Mississippi, Alabama, Georgia and Florida, the regional favorites are still selling.

national jeweler spoke to a handful of retailers in the Southeast to find out what’s selling and what’s not in their area. Surprise, surprise: diamonds, David Yurman and Rolex are these jewelers’ best friends.

The cornerstone of most businesses in the Southeast is diamond jewelry, primarily in the engagement ring category. Preferences run overwhelmingly toward the round brilliant cut, with the princess cut coming in a distant second. Fancy cuts, such as pear and heart shapes, sell very occasionally. And, according to more than a few jewelers, the marquise cut is well on its way out. But that’s where the agreements end.

Jewelers are all over the place on qualities and price points, with sales ranging from clarity-enhanced stones in the thousand dollar tier all the way up to six figures for colorless, faintly flawed rocks sold in the region’s big-money bastions, such as Palm Beach. Yet it is clear that De Beers’ marketing efforts have paid off everywhere.

“Diamond is my main business,” says Todd Condon of Condon Jewelers in Jensen Beach, Fla. “I concentrate on the basics. If that’s not the No. 1 reason people come to my store, I don’t know what is.”

Diamond earrings and diamond pendants are also strong regional sellers, with the round-brilliant cut again taking the lead. As for the sizes that sell, weights start at a half-carat and go up from there, typically reaching a ceiling of about 1 1/2 carets, although several jewelers said, in mildly surprised tones, that they recently scored some big diamond sales up to four carats in total weight.

“In engagement ring price points, our niche is $5,000 to $10,000. But right now, I’m working on a 4-carat piece that’s $70,000 and one that’s $20,000,” says Bonn Simon of Facets Jewelers in Virginia Beach, Va. “Now that’s unusual.”

Colored-stone sales, on the other hand, have been in a slump for the past several years, say Southeast jewelers almost unanimously. When prospective customers walk into a store, they’re not seeking color and, if they are, it’s more often than not going to be blue sapphire. The vast array of offbeat color on today’s market-from flame-colore citrine to violet-infused tanzanite–rarely penetrates this more conservative arena, where diamond sales eclipse almost every other jewelry category.

“Our colored stone sales have been weak for a few years,” says Simon. “We have a big inventory of color, both loose and mounted. But I guess it’s question of priorities. I think color is a harder sale for most salespeople. It’s easier to follow the typical diamond, gold, two-tone route.”

Pearls have also seen better days, with many people reporting “so-so” sales since before Christmastime. Among the jewelers who carry Chinese freshwaters, they report that the market seems to have swallowed up the akoya pearl, leaving the saltwater action to the bigger and pricier South Sea and Tahitian pearls.

“I think the freshwaters have jumpstarted the [pearl] market,” says Condon. “Now, I am selling three freshwaters to every one saltwater. I have increased my pearl business 25% to 30% since getting into freshwaters.”

Reports indicate the South Sea and Tahitian gems are selling in earrings or pendants, but rarely as necklaces, largely due to price. “A 12 mm South Sea pearl necklace doesn’t sell like a 7 1/2 mm akoya necklace did,” says Simon.

On the metals front, the leader in sales–by dollar value and often by unit–is platinum, which has helped stave off the yellow gold revival, at least for the time being.

“In bridal, right now, it’s platinum solitaires and three-stone rings,” says Tim Haney of Haney Jewelry Co. in Calhoun, Ga.

The platinum craze has made white-metal lovers out of women in the non-bridal category, too, showing strong gains in earrings and pendants. Many jewelers say this is typical of this sector of the country, where the fashion world’s trends take a good year or two to sink in.

“We do well with pendants and earrings in platinum and have been doing well for the last four years,” says Brenda Philemon of Garibaldi & Bruns in Charlotte, N.C. “We have not seen yellow gold make its comeback.”

But what has become firmly entrenched in the Southeast jewelry scene is designer jewelry with a name. David Yurman and Lagos are two designer collections that have found their niche in this part of the country. According to many jewelers, their designs boast the right amount of name recognition to draw customers into the store, not to mention that the pieces bear the signature qualities that define a successful brand.

“We do well with Yurman’s complete line,” says Philemon. “I’ve been in the business 25 years and he’s the most recognized name in the jewelry industry that I’ve ever seen.”

Of course, there are so regional favorites to contend with even within the Southeast, with Florida buying tastes running to bigger and flashier pieces, for example. These region within-a-region preferences play out in each individual store, forcing jewelers to constantly fine-tune their merchandise mix so that it appeals to their customers’ sense of fashion.

“We’re on the East Coast and are very influenced by the Northeast, New Jersey, New Yorkers,” says Condon, whose Jensen Beach location is firmly planted on U.S. 1, the panhandle’s main thoroughfare. “It’s a lot more show — pretty but big. It’s got to be big. They called my original selection ‘baby jewelry.’ I had to clearance out all of that stuff.”

Another stronghold in Florida is marine-inspired jewelry, continues Condon. Whale pendants, sand dollar earnings and turtle bracelets, among dozens of other sea-life designs created in 14-karat gold, are finding favor in Florida’s coastal communities at the moment.

Condon says his two strongest up-and-coming lines are the Wyland Gold collection (an offshoot venture Wyland, the ubiquitous marine-life artist whose paintings and sculptures are found in galleries, museums and gift shop from Hawaii to the Florida Keys) and Guy Harvey Gold, a collection put together by a local artist who recently expanded his thriving sea-life T-shirt business into gold jewelry. Harvey now produces pieces like golden manatees with emerald eyes, shell bracelets, game-fish pendants and assorted charms that retail from $800 to $900.

“The sea-life category has been great for us,” says Condon. “About two years ago, we really started to concentrate on it. We can’t keep it in the store. And it’s gold, so there’s a good markup.”

In the watch category, Southeast retailers report varying degrees of success, describing sales as brisk, sluggish and everything in between. For some retailers, watches are a pillar of the business, as with Facets Jewelers, where Rolex is king. For other retailers, watches are a drain on resources, presenting far more headaches than profits. But there doesn’t seem to be any real pattern to suggest who falls into which classification.

“We have three watch lines and they’ve been down for the last year,” says Haney. “All the Swiss, they’re reluctant to get on the ball and do design work. They’ve dropped the cookie on that.”

Most of the stores that national jeweler spoke with sold just a handful of watch lines: Gucci, Movado and Rolex had several mentions. Garibaldi & Bruns, however, was the exception with 11 watch lines, all of them Swiss except for Seiko.

Merchandising in the Southeast means different things to different jewelers. Some retailers sponsor high-end trunk shows, such as Facets’ upcoming presentation on diamond cutting by the store’s cutter. Others focus more on external advertising, offering promotions designed to increase store traffic and drum up sales, while still others devote their energy to in-store displays, changing their showcases more often than they change their flower arrangements.

Despite these efforts, jewelers in the region like their counterparts across the country by and large have seen a slight cooling at the cash register in the first half of 2001. Customers are more careful about their purchases these days. They are approaching the goods in the windows and beneath the counters like students, giving careful consideration to each and every piece of jewelry, rather than impulsively snatching up the biggest and brightest centerpieces after a cursory once-over. They are educating themselves more than ever before, waltzing into stores demanding lab reports and grading certificates, sometimes to their jeweler’s chagrin.

“A lot of people want a certified diamond,” says Condon. “They don’t even know what it is, but they want it.”

The upshot of all of this is that many jewelers have pulled the reigns in on their buying. They are reluctant to stockpile because that’s what got so many of them into trouble during the holiday season. Caution, it seems, is the prevailing attitude on both sides of the jewelry counter.

But, somewhat unexpectedly, this standoffishness has not translated into mass pessimism. Most jewelers say they are prepared to ride out the economic turbulence, focusing on offering their customers top-quality jewelry at fair price points, an approach that is generally described as recession-proof.

“Last Christmas was our best Christmas in 56 years,” says Haney, striking a different chord than most of his fellow retailers. “The message that came through was better quality. Platinum over gold, better quality diamonds, Ceylon sapphires, South Sea pearls. We watched our buying and listened to our customers more than ever.”

Midwest Retailers Hold Their Own

Retailers in the Midwest recently told national jeweler they are optimistic that business will eventually pick up once the stock market regains its footing and the recession turns out to be more fiction than fact.

Until then, however, jewelers, especially in Ohio, Michigan, Indiana, Illinois and Wisconsin, maintain that business has seen a steady downturn since the middle of 2000. Business that does happen doesn’t have the same gleam in the eye it had in the millennium days of 1999 and beginning of 2000. Caution is the watchword, both among jewelers and their customers, say heartland retailers.

Other jewelers in the area say that business may not be as slow it seems; rather, the cooling trend may just be an illusion in comparison to sales in 1999.

While some Midwest retailers say business is making a soft landing from the prosperous times, others have far more grave concerns, like downsizing in the auto industry in Detroit. Among those retailers most affected by economic downturn, less consumer demand even for staple goods like diamond stud earrings and tennis bracelets has left inventories stagnant.

One mainstay jewelers are glad to have in their stores is the diamond engagement ring. Regardless of a trend shift from the bigger-and-whiter to the ore price-conscious better cut delivering the best diamond bang for the buck people are still getting engaged in the Midwest. While fancy shapes and trendier looks aren’t as hot, the standard round-brilliant diamond engagement ring between 0.75 and 1 carat has helped most jeweler hold their own in recent months.

“Everything out of our staple goods is pretty slow. I just think it’s because the economy is slow. Everyone is feeling the same way,” says Robert Fixter of Sartor Haman Jewelers in Lincoln, Neb. “Rapaport just sent us a survey to fill out, so that’s n sign to me that they know the economy is slowing down and it’s having an effect on business. One thing we do like, though, is that diamond engagement rings sell all year.”

Out of all the engagement rings Fixter has in his stock, Hearts on Fire diamonds continue to be his strongest seller because of their uniqueness and ease-of-sale.

“We have 900 different engagement ring styles and demand is pretty varied. So, it’s kind of difficult to pinpoint which particular style is selling best. If there is one though, I would say the solitaire engagement ring. Platinum is okay; it’s not great. For our solitaires, we set them in 14-karat gold with an 18-karat head. White gold is still more popular.”

To target the engagement ring customer, Fixter relies on radio ads.

“Radio works,” says Fixter. “We use ads on one station and they usually talk about our store and things that make us different.”

Business at Godfrey Jewelers in Battle Creek, Mich., has slowed so much from last year that some of the best-selling items in stock are a selection of clocks. While high-end, trendy jewelry has waned in demand and begins to gather dust in display cases, tennis bracelets and bracelets with diamonds, rubies and emeralds have taken over as the prime movers.

“I only wish there was more selling,” says John Godfrey. “I would say we’ve been mainly selling diamond jewelry and loose diamonds. We sold a few loose diamonds between 0.75 carats and 1 carat, nothing larger, in what I call mid-quality G, H, I and Vs to Si.

Goods that continue to linger on Godfrey’s shelves since last year include colored stone jewelry and larger-sized, nicer-quality diamond jewelry set in platinum.

“I had a couple of people walk out recently on prices and they were shopping for nicer platinum jewelry,” says Godfrey. That’s not typical of last year. People are being much more cautious. We’ll see what happens. I’ve spoken to a lot of people who have said the Fed lowering the interest rates may have a big effect on the economy.”

A little boost to Godfrey’s business so far this year has been a week-long St. Patrick’s Day promotion.

Customers were challenged to find hidden inside a balloon in a roomful of green balloons a piece of paper giving the winner a great deal on a diamond ring. In another contest during that week, a lucky customer won a loose emerald and Godfrey sold her a mounting for it.

“And this is not an Irish area,” says Godfrey. “Customers had a lot of fun.”

Godfrey says the plan for his business is to proceed with caution. He plans to buy more of the hot-selling diamond, ruby and emerald bracelets toward late summer and early fall but will be very cautious about what other types of goods he buys.

“We’re going to be very cautious. We didn’t have a great Christmas, so we’ll probably need to buy after the first half of the year. There still are a nice amount of goods in the store, so We’re going to be very picky about what we’re going to buy. I think things really must be slow with the economy,” says Godfrey. “I just received telephone calls from suppliers who we haven’t dealt ith in years. For them to make cold cal s out of the blue like that is a sign to me at they’re looking for business.”

So far this year, this main seller in Trein’s Jewelry in Dixon, Ill., has been diamond stud earrings Store co-owner Linda Brantley says that while higher-end merchandise has not been not as strong compared to the same time last year, studs have kept overall sales to about even to what they were in 2000.

For the past 20 years, Trein’ s has offered a trade-in program for diamond stud earrings, where customers can trade in studs they bought in the store and put the value toward a better st.

“We have a lot of diamond studs out there,” says Brantley. “This is a small town, and people say our studs are the nicest because we don’t sell anything lower than a G. We’re very fussy about cut. From across the room, these things sparkle.”

To stock up on some of the diamond earrings and loose stones that have been selling so well this year, Brantley is also preparing to take a trip o Antwerp.

“It’s a real tough job but someone’s got to do it,” jokes Brantley. “I have a dealer in Antwerp and if he doesn’t have what I’m looking for, he makes it possible to find it. The trip usually takes a week or two. I’ll go to Antwerp get my business done and spend the rest of the time in some place fun like Italy, or Holland in the spring to see the tulips.”

Brantley makes the trip as part of her involvement with the Independent Jeweler’ s Association (IJO), which offers members a chance to buy directly from Antwerp dealers. Most retailers in the IJO are from smaller, rural towns and must rely on their ability to advertise the fact they buy directly from Antwerp.

The biggest seller in Trein’s store is the Spirit of Flanders, which is cut and sold exclusively for IJO members.

“It’s a different niche. It’s something that we can have that no other store can,” says Brantley. “One thing about the Spirit of Flanders is that it looks bigger and the color is better than it really is. But the most important thing is that no one has it.”

Brantley’s son, Eric, 32, has also brought strong business to the store with his own designer jewelry lines.

“He makes everything-rings, pendants-and they’re all very popular. I would say half the stuff in the store we sell are his,” says Brantley. “People who come in often have a lot of diamonds and colored stones and he’ll build around it. He also lets them participate in the design.”

At Lang’s Jewelers in Muscatine, Iowa, business is about even with the same time last year, although store owner Martha Lang says she does notice a difference in consumer confidence.

“Right now, I think engagement rings, 0.5 carat, are more popular,” says Lang. “For some reason I think we’re bucking a national trend with fancy shapes. Marquise are more popular for us, while they’re slowing down most other places. We’re also selling a lot of watches in the $150 to $350 range. A lot of folks still look for platinum products, and they’ve remained pretty steady for us. Last year, we had our largest year ever in that type of product, but this year people are going a lot smaller. They’re pulling back into nicer qualities, but they’re just getting smaller stones.”

Engagement rings by Peter Sax and I.B. Goodman remain popular in Lang’s.

“We’ve been handling more of them in platinum and 18-karat white gold,” adds Lang.

Engagement and wedding sets are also popular in Ohio. Most retailers in the state report more 0.5-carat to 1-carat engagement ring sales so far this year, which has offset the drop in bigger, higher-end jewelry.

“So far, bridal has really picked up for us,” says James L. Thomas of Thomas Jewelers in Findlay, Ohio. “Mainly 0.5 carat to 1 carat and not necessarily the three-stone.”

Round-brilliants, followed closely by princess cuts, have been the most popular shapes in the store this year. Jewelry has been selling in the middle of the store’s usual $1,600 to $5,000 price range. Thomas’ customers are buying between J and Si2 to E and Vs, the qualities they bought last year at this time. Carat-weight diamond stud earrings have been some of the main sellers in the store.

So far this year, Thomas has maintained his usual amount of radio advertising. He spent 5% of last year’s sales on advertising.

“We’re very heavy in radio. We have a new message, not a new method. We don’t really push brands too much-we push us.”

Status Quo Prevails in Colored Stones

In sharp contrast to last year’s robust spring selling season, 2001 has been slow and steady for most colored stone dealers who say there is little news to report. There have been no major price shifts, no dramatic supply changes and no new gem discoveries (apart from a major ruby strike in Madagascar that is yielding hundreds of kilos of mostly dark material).

In fact, most dealers voice the same refrain: Customers are being cautious, big-ticket items are moving more briskly than run-of-the-mill goods and the color universe continues to expand, growing more varied as our cultural preferences come back to center following the black-and-white binge of the 1990s.

“In general, business is OK. It could be more brisk. People are very cautious and want to weigh out what’s happening now and what might happen by the end of the year,” said Roland Naftule of Nafco Gems in Scottsdale, Ariz. “They’re buying stones that they can get mounted in time for the holiday but are holding back on jewelry, maybe not wanting to sit on it during the summer.”

This is typical when cash flow slows to a trickle, he said, adding that in times of stock market distress, fine quality is always a best seller and mediocre goods are slow to get picked up.

Here’s a breakdown of supply and demand for the industry’s most significant stones.

Sapphire

Sapphires from Madagascar are still the trade’s hottest ticket, despite a tightening supply, 10% to 15% price hikes (primarily for pinks) and more stringent enforcement of government control measures.

Shaun Ajodan of N.Y.-based Shaun Gems attributed the market’s vitality to the fact that Sri Lankan production is down and Madagascar goods, which are easily confused with Ceylon material, have filled that void nicely.

“Madagascar goods are so close; if anything, they’re even prettier [than Ceylon goods],” said Ajodan. He added that finer goods in 10 carats and up are hitting $3,000-$4,000 per carat, those between 5 and 10 carats are hitting $2,000-$3,000 per carat and goods between 2 and 3 carats are pricing out at $1,500-$2,000 per carat.

Prices on the pinks are rising steadily. According to Steve Taylor of Taylor Gem Corp. in Sacramento, Calif., pinks in 1-carat sizes are at about $450-$650 per carat.

“When they first came out, they were about 20% to 40% less,” he said. “We were selling everything for less than $500.”

But by all accounts, the country’s sapphire business is starting to lose some of its early momentum, as miners and buyers give up on Ilakaka and flock to the new ruby strike in the eastern province of Toamasina.

A triple murder in Ilakaka in March didn’t help matters. According to Tom Cushman of Sun Valley, Idaho-based Allerton Cushman & Co., the town has been put on a 9 p.m. curfew following an incident at a local hotel where the owner’s son and two Sri Lankan gem dealers were killed. The crime was allegedly committed by a Malagasy miner, who became enraged after learning that the hotel proprietor-cum-gem dealer was paying him less than market value for a continuous supply of sapphires.

Emerald

Still recuperating from the bedlam that ensued over enhancement issues several years ago, the emerald trade continues to lick its wounds and fortify itself against consumer vigilance. Prices on Colombians are firming up, said Ray Zajicek of Dallas-based Equatorian Imports, although they are still less than what they were three to four years ago. “It’s been a slow recovery,” he said.

Shaun Ajodan said fine-quality Colombian goods in 7-to 15-carat sizes are easily going for $7,000-$ 15,000 per carat, whereas “really fine gemmy goods” can cost upwards of $25,000 per carat.

Ruby

An estimated $40 million worth of rubies from at least four important deposits discovered earlier this year in Madagascar’s eastern province of Toamasina are now flooding Bangkok, according to sources familiar with the Thai ruby market. The goods, which have yet to be priced, are reportedly unheated and reminiscent of the older Siam ruby, a dark, garnet-red stone that fell out of production when miners in Mong Hsu, Burma, hit the ruby mother lode in the early 1990s.

Tourmaline

West Africa’s once ample supply of rubellite is dwindling, like most of the continent’s known gem reserves, said colored stone dealers. This scenario also holds true for pink tourmaline, which was hot last year, said Daniel Assaf of The Tsavorite factory in New York. Demand has fizzled, coinciding with the downturn in supply.

He recently bought a three-kilo parcel of Nigerian pink tourmaline that will yield “good calibrated sizes,” but this year, he thinks the goods may take some time to move.

“It would have gone really quickly last year,” he said. “But both supply and demand died at the same time.”

Not that Brazil, the world’s other big tourmaline producer, is faring much better on the supply side. Fine Paraiba tourmaline, whose very rare “Windex blue” color puts it in the nosebleed section of the price-per-carat list, continues to command buyer attention, said Naftule. Too bad supplies of the stone are virtually nonexistent.

In contrast, Taylor said he recently ordered “nice green tourmaline,” in rounds and trillions over 6mm from the new owners of a formerly defunct mine in Brazil.

Tanzanite

Prices on quality tanzanite are higher than ever before, due to a supply shortage that threatens to make these gems more exclusive than the trade ever expected them to be.

Dana Schorr of Schorr Marketing in Santa Barbara, Calif., said demand for the gemmy goods continues to outpace supply, while overproduction in Jaipur, India, has produced a glut of low-quality, calibrated material, bringing a substantial price decrease to boot.

“Fine tanzanite will maintain its price structure,” he said. “But when people dump low-end, included goods, it can drag the whole market down until the stuff filters through the pipeline. For single, well-cut stones, prices are stable.”

Tsavorite Garnet

There isn’t much happening on the tsavorite scene, said Assaf, except for a slight increase in demand for 1 to 2 carat sizes. Prices have been very stable since 1999, when they experienced a brief dip because a new find in Tunduru, Tanzania, wrongly convinced the trade the market would be forever glutted.

“Melee is being widely used these days,” he said. “It’s becoming a great replacement for emerald. A very fine 3-carat goes for about $1,300-$1,600 per carat. Fine 2-carats are selling for $750-$950 per carat. And 1-carat sizes are at about $550.”

Spessartite Garnet

Supplies of orange-colored spessartite garnet from Nigeria are drying up, only a year after quantities of it appeared in Tucson Still, interest in the gem is growing.

“When it first came out, people looked at it like glorified citrine,” said Assaf, citing the market’s slow acceptance of this refractive gem. “The difference from last year to this year is that there is not as much large-sized material available, but a good amount of well-cut calibrated goods in rounds, trillions and princesses.”

Peridot

Peridot is becoming the toast of the jewelry scene, as designers fall in love with its pretty Granny Smith apple color. Yet prices on Pakistani, Chinese and Arizona goods are holding steady, said Mike Romanella of the Commercial Mineral Company in Scottsdale, Ariz.

Production from the three major peridot-producing regions is distinguished by size. Arizona yields the smallest stones, up to about 3 to 4 carats; China produces 5- to 9-carat goods; and Pakistan supplies the world’s finest (read: largest) specimens, ranging anywhere from 9 to 50 carats.

Assaf said Chinese goods are going for about $23 per carat, while the material from Pakistan, which tends to be cleaner, is going for close to double that amount.

Aquamarine

A stream of “very good quality” aquamarine is flowing out of Madagascar, said Naftule, but don’t get too excited just yet. “These will not last,” he predicted.

Iolite

As prices for fine quality tanzanite hover around $650 per carat, members of the trade are turning to iolite for a more cost-effective alternative. Ironically, the surge in demand for this purplish-violet stone has created a parallel price hike of about 25% to 40% for good quality, said Romanella. That brings prices for fine 2-carat stones into the range of $30-$40 per carat.

Using Incentives To Generate Productivity

You’re sitting in your office pondering the state of your business over the past six weeks. Perhaps you’re approaching a major selling season and you have a fair amount of inventory on hand that, quite frankly, you would like to turn into some real dollars, which would be meaningful to your business.

When you want to give your business an extra boost or maximize your productivity during a key selling season like Mother’s Day, Christmas or graduation, you should consider creating an incentive program for your sales staff.

Many owners today are afraid of incentive programs because of all the war stories they’ve heard. There is no question that while some incentive programs work, others fail.

It’s my contention that the success or failure of an incentive program is directly proportional to the type of program, the incentive offered, the length and continual merchandising of the program and the feedback given throughout.

Let’s examine incentive programs for implementation in your business from a pragmatic point of view.

Types of Incentives Offered: Cash

There is no substitute for utilizing cash in your incentive program. In most cases, people prefer cash to other incentives like TVs and radios. if you’re going to utilize cash, it should be allocated in precise increments and paid as a reward for specific sales results. These increments can be fixed dollars ($100, $200) or they can be established as a percentage of salary.

Cash is a motivator only if it is paid frequently during the contest. If, for example, your contest runs six weeks, the cash payout should be made at the conclusion of each week. Contests that pay cash only at the conclusion of the program frequently lose the interest of the participants along the way.

One client ran an extremely successful cash-incentive program. He placed on the wall in the back room of his store a large board to which he affixed 30 $10 bills, one for each day of the month. Each employee was assigned a specific daily target. The first one to reach that daily target would run to the back of the store, tear the $10 bill off the board and then write his or her name in its place.

This incentive program accomplished two objectives: It awarded immediate financial gratification to the winners, and the winners were recognized by their names being inserted on the board. In addition, during this incentive program, the client exceeded his 30-day sales objectives by 50%.

Trips

Trips to exotic places are always good incentives, if you’re located on the East Coast, a six-day trip to the Bahamas might be an excellent inducement. On the West Coast, a trip to Hawaii or perhaps Puerto Vallarta would be a terrific reward.

While trips have a great perceived value among participants in an incentive program, the actual out-of-pocket costs are substantially less than a similar cash contest. When you consider the packages offered by travel agents, as well as trips to resorts during the off-season, a very nice incentive package can be put together. Call your travel agency and see what they can do for you.

Giving Prizes

Things like TV sets, stereos and sporting equipment are always popular items in incentive programs. While some programs offer a specific prize for winning a contest, others provide a catalog from which the winner can select a prize as a result of the number of points accumulated in the contest.

Prizes become a good incentive because they can be purchased at wholesale prices and merchandised to the potential recipients at the retail value. For example, a television that costs you $300 could be framed this way: “The person who sells the most during the next six weeks wins a television set valued at $600.”

Dinner or a Night Out on the Town

This incentive is very popular, rather inexpensive and goes a long way toward promoting the relationship between your employee and his or her spouse. The award is only attractive, however, if the restaurant selected is one of the most, if not the most, exclusive in town. The restaurant should be one that the employee would not normally frequent because of the expense.

Dinners in which you join the employee at the restaurant can also be extremely valuable. Remember, when awarding this prize, allow the employee to select the date and, during the dinner, be sure to focus the conversation around his or her family and personal goals. And, above all, avoid discussing business.

Awards and Plaques

Trophies, awards and plaques are extremely valuable because they usually find a permanent spot on the wall in your employee’s home. They are a source of pride that cannot be eaten or spent and will be a source of satisfaction forever.

Several retailers around the country with whom I conduct sales and management training frequently hold awards banquets at which time plaques, trophies, cash or trips are awarded for specific goals achieved.

Several chains have a President’s Club in which they induct the Top Five or Top 10 salespeople. One chain awards blazers with a President’s Club patch, another gives a commemorative ring and another awards a beautiful lapel pin. Whatever the award, you can be assured that your employees’ sense of pride won’t permit them to leave the house in the morning without it being prominently displayed.

Prior to announcing your incentive program, it is important that you determine the following five objectives:

  1. What is the purpose of this program?
  2. What specific sales dollars do you expect to gain from it?
  3. What is expected from each employee during the program?
  4. What will be the length of the incentive program?
  5. What will the prizes be and how frequently will they be awarded?

You would not get into your car and just take off without a specific destination in mind and a road map in hand. The same holds true in conducting an effective incentive program: You must set a specific objective, preferably a dollar objective, and establish the criteria of your incentive program accordingly.

It is critical that the objective be specific and obtainable. If the objective is a pie-in-the-sky goal, perceived to be unattainable by your sales staff, the program will fall on its face.

Generally speaking, incentive programs that last longer than 40-45 days are ineffective. To conduct the contest for a longer period of time will leave employees disinterested and unchallenged and, by the tune the payout is made, many will have forgotten what the program was about to begin with. Run the contest for a shorter period of time, get greater hype and, ultimately, greater sales.

Merchandising the Contest

Contests and incentive programs fail because they are not appropriately merchandised; that is, people are not advised on a periodic basis as to their standing in the contest relative to the objective and their colleagues.

A golfer looks at the leader board during the golf tournament to know where he stands in relation to the number of holes to be played and the competitors to be beaten.

A baseball player, by examining the scoreboard, knows the number of innings to be played and the objective to be obtained. One of the reasons the sport of boxing lacks wide interest and appeal, other than the fact that two people are beating each other up, is the fact that no one, not even the participants themselves, knows what the score is until the bell sounds in Round 15.

It is a proven fact that people will work harder and more effectively when a specific goal is assigned and their progress toward that goal is periodically measured and announced.

Incentive Programs: Are They for You?

Examine the different types of programs discussed in this article. If you decide to challenge your people, remember to:

  1. Set specific obtainable objectives.
  2. Minimize the length of The contest.
  3. Give ongoing feedback.
  4. Give the payout or reward as quickly as possible.

South Central: Neither Panicking Nor Ecstatic

South Central jewelers told national jeweler they are selling the same quantity and quality of jewelry as they did last year.

Depending on the perspective of the jeweler, sales either equal to last year, lower than 1999 or about the same as 1998, could either mean that 1999 was simply a phenomenal year or that the trade is facing a steady decline in demand due to unseen economic forces. For the most part’ however, most retailers, especially in Texas, Colorado, Oklahoma and Arkansas, are not panicking.

Ben Gordon of Judge’s Jewelers in Houston is optimistic about the state of demand for jewelry despite the economic uncertainty suggested by the news media. His customers range from young college grads who are getting married and landing that first job to older couples who are either getting remarried or buying fashionable jewelry for the thrill of it.

This year, he has also seen a continuation of an ongoing trend of young, collegiate couples in the market for 1- to 2-carat weight diamonds of high-end quality, though they are unable to foot the bill themselves. Gordon says the trend stems from an increasing importance among young male buyers to show their worth in terms of the value of the ring.

“They want to show how much value they give to the wife-to-be. Value is very important among the young customers I deal with. What is it worth? It’s like a dowry on the man’s side. They want to make sure they’re giving the bride something of value, something that the bride’s parents could take anywhere to get appraised and be assured that its worth enough,” says Gordon.

While the bridal sets have remained strong in his store, Gordon still sees potential for other markets, such as professional women buying jewelry for themselves.

In 2001, he has seen strong sales in titanium jewelry, which is designed in the store. According to Gordon, the right design speaks for itself, saying, “This is the place to shop.”

“The industry is so focused on the bridal market that we have neglected the age 60plus woman,” says Gordon. “What I’m seeing is a trend in titanium wedding bands. People want something more durable because they want to be able to workout while wearing the jewelry.”

“Out of the fancy shapes, princess is still the best. Rounds are still the most popular for us, but we can’t give away marquise or pears. I don’t think the economy will have an effect on overall business. I think it’s just a lot of hype from the media. People are still buying. People who have been married for 25 or 30 years want to enjoy it. I’m still finding that jewelry is for the living,” says Gordon.

Kathleen Wilson of Legend Jewelers in San Angelo, Texas, says the main part of her business this year has come from redesigns by the bench jewelers in her store. Wilson says most couples look to have older-styled engagement rings melted down and refashioned to a newer look.

The southwestern trend of silver and gold also remains strong, says Wilson.

Wedding rings have shown strength, as well as sterling silver anklets, bracelets and rings. In the wedding sets that have sold so far this year, diamonds of 0.5 to 3 carats strike a balance with the quantity and quality sold last year.

“They [the customers] want something in style. We went through the nuggets, the clusters, the sleek look, and now it’s two-tone–it allows them to mix gold pieces with silver ones.”

Because her customers have grown more price-conscious this year, Wilson says her staff, as well as the store’s radio ads, focus on the store’s message that it caters to a customer’s budget.

“We have the ability to sell in the price range that meets our customers’ needs. If they say, ‘We have $2,000 and we want an oval in the center with side stones,’ then we take the time to cater to them. We realize that not everybody can afford a 3carat stone.”

Tennis bracelets and diamond stud earrings, while still selling, are not moving as rapidly as they did last year at this time says Wilson. Nevertheless, consumer demand has remained steady for Legend’s custom design work.

“Most of our customers have been coming in as couples. They have a design in mind. They’ll ask us if we can do something with a certain center stone, and we just work around the look they want,” says Wilson.

Because radio continues to be the best medium to reach Legend’s customers, Wilson airs service-oriented ads. According to Wilson, the San Angelo area has a host of country western and easy-listening stations to choose from, one of which can be heard playing in her store daily.

“Radio seems to do well for us, not so much TV,” says Wilson. “We ran a lot of print ads for Valentine’s Day and Christmas, but because there are so many stations and all the towns here in Texas are distanced so far apart, radio seems to be a very popular medium. All sorts of people I’ve talked to are always listening to some kind of sports score or what the weather is like, so that’s why we advertise there. We advertise customer service. We realize that if we don’t give them the customer service they’re looking for, they will go elsewhere,” says Wilson.

At Garwood Jewelry in Fort Collins, Colo., engagement sets with stones between 0.75 and 3 carats remain the headliners, selling the same amount as last year. In fact, storeowner Debbie Reider says she’s been selling a little of everything to the same extent as last year.

“Funny as it may sound, diamond stud earrings, even during Christmas, were slow. We’ve sold a lot of pendants and colored-stone rings, but not a lot of earrings,” says Reider. “I’m still seeing a lot of yellow gold and a lot of white and yellow two-tone. Just a little bit of everything. I’ve mostly been selling rounds, and once in a while I’ll get a request for a marquise.”

Reider says she usually keeps her inventory low to avoid being stuck with a caseload of merchandise that gathers dust.

“Generally, we find that it’s better to buy steadily as the year progresses instead of either overstocking or having to buy at the last minute,” says Reider. “My husband is really good at knowing what and when to buy.”

Hirsh Chapman of Lavery’s Jewelers in Leavenworth, Kan., says his sales are about the same as last year, which still translates to less overall consumer demand.

“I think all the talk about the economy in the media is [nonsense] because they’re looking at the stock market,” says Chapman. “Whether the stock market goes up or down is almost irrelevant to the ordinary blue-collar guy out there bringing something home for his family, and that’s our customer. When they look at the economy, they need to go to Main Street, USA.”

But despite his reservations about the economy’s coverage in the media, Chapman has noticed less buying and a slowing economy on Main Street.

“I think buying is down and it was down last year, too, so it’s all about the same as last year. I think we have a real problem in the jewelry industry with the Internet and cable TV. I see a lot of that stuff coming in to be appraised.”

Items that remain in Chapman’s inventory from last Christmas include tennis bracelets and diamond stud earrings. The steady sale of gold charm bracelets and G, H and Si diamond engagement rings has evened out sales to a break-even pace.

Kelly Newton of Newton’s Jewelers in Fort Smith, Ark., says she’s been selling lots of things lately.

“Rolex watches have been extremely strong. So have AGS Triple Zero, Lazare Kaplan. We’ve been doing super with them and the AGS stones. As far as size goes, we’ve been selling everything from 0.50 to 2 carats,” says Newton. “We’ve been the strongest in the past few weeks than at any point last year. We’re very surprised. We’ve been listening to the TV about the economy and expecting something to happen, but so far we haven’t found anything bad.”

Diamond necklaces are not as strong this year as platinum bracelets or studs. Lazare Kaplan diamonds are among the strong sellers in the store.

“I don’t know why Lazare Kaplan sells so strongly. I guess it’s because we tout them as the old ideal, and [they are] the best-priced compared to any other diamond of that quality,” says Newton.

Coleman Clark of B.C. Clark Inc. in Oklahoma City says his store has sold mostly diamond engagement rings this year. In all three of his Oklahoma City stores, it’s business-as-usual, says Clark.

“I’d say our silver jewelry continues to be popular, especially David Yurman silver, and that doesn’t mean gold hasn’t slowed down. We’re continuing to sell the diamond basics, like pendant engagement rings in sizes of 2 to 3 carats, even larger. Mostly very good qualities.”

Diamond stud earrings and marquise cut diamonds are plentiful in stock and demand, says Clark.