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.”