Sunday, June 10, 2012

Las Vegas: nothing, and everything, has changed

I have been going to trade shows for nearly 40 years.  That is a mind-bending long time when I stop to think about it, but it does have its advantages.  It allows some stripping away of artifacts, distractions that can mask reality.

We all speak of how much the "world" has changed, and it has.  Over those years we have acquired the PC (and lost secretaries?), cell phones,  hi-def TV, digital photography.  The Internet has revolutionized our lives. We have Amazon, Youtube, Ebay and Facebook.  We have a billion sites offering a trillion products and services.  We have blogs - like this one.  The software selling business is going away, and so are many newspapers.  Privacy is a thing of the past.

In our industry, whole channels of distribution have disappeared (think traditional distributors, catalog showrooms); others have shrunk in number to a handful of giants (think mall chains, discounters and department stores).  The Internet has given us countless on-line jewelry stores and diamond dealers.  It has also been liberating for small manufacturers who have found a public for their goods spread out all over the world.  And that transformation has only begun.

The nature of business has shifted.  Gold chains used to be a huge business.  Now, the number of producers in Italy (once the largest by far) has declined to barely a half dozen, and even they produce very little.  Diamond jewelry used to easily carry a couple of carats of goods.  Today, other than in the high end, we have been squeezed down to half-pointers and low total weights.

Still, for all the disruptive forces besetting our trade, one would think all was fine, judging by the just concluded shows in Las Vegas.  There were many visitors and orders were being written.  Most vendors did not complain about the show results at all.  The jewelry business is definitely not dying and the public has not lost the desire to own precious adornments.  But some things were clear.

In years past, the jewelry business was a major factor in gold consumption.  That is no longer the case.  Investors and central bank purchasers are the major factors, which inherently introduces volatility that complicates our lives.  For the foreseeable future, there is little reason to think that prices will decline significantly.  On the contrary, it is more likely we will see $2000 gold soon, and perhaps $2500 gold next year.  More and more, gold will become a metal for the elite, and for bridal rings.  But it will also compete more with platinum and palladium.  The bottom line is that we saw much less carat gold jewelry.

Buyers at the show were writing orders, but they were writing cautiously.  But the more they live on inventory, and use sales revenues to cover overhead, the more their capital will erode, and the more the business will concentrate into fewer hands.

Vendors are being creative in using alternative materials, in some cases in a wonderfully inventive way.  It is clear that many, if not most, retailers have capitulated when it comes to buying gold.  Where they fought shifting to silver and other materials for years, many have now adapted to them.  The public has shown that it will accept the new direction - out of necessity as well as preference.  The competition in these lower price ranges is becoming fierce as more and more companies start producing these new lines.  Some of the fat margins that were available even a couple of years ago are getting thinner.

In this market, retailers are becoming more aware of the importance of differentiation in the fashion area.  That means finding new vendors is important, and that means that the shows will continue to be important.

The shows demonstrated that for all the changes we have seen, the business is still here, face to face, vendor to retailer, retailer to consumer.  With all the changes, the basic facts remain the same.  Consumers want jewelry.  Find a way to give them what they want.


  1. Really, really loved it, Ben - we all needed the long perspective -- and the truth, rather than hype, which has crowded out so much truth... Bravo...

  2. One of the things that's really interesting is your point about the majors having shrunk to a handful of giants. The jewelry industry certainly isn't alone in that respect so I wonder if it's just a retail trend in general and not specific to us?

    1. Hedda, I think you have made a very good point and a sad one at that, I remember when it started. It started with a merger, then a buy-out. Next came a branding war and quality went down and down. The brave few who stood alone deserve our respect and thanks! I agree it is a retail trend in general. Until people look at every label to see where things are made and what it is made of, they may actually be paying much more for an inferior product. I like the phrase "Made in America"! For jewelry, I love, "Made in America or Italy"! Thank you for your years of expertise to this wonderful industry, Jan Calass Nuckols Montgomery

    2. Hedda, consolidation has always been a powerful force in all commerce. We used to have dozens of computer manufacturers, drug companies, and luxury product manufacturers. Now we have Dell and HP, Pfizer and Merck, LVMH and Richemont. But as for guild retailers in local markets, consolidation will not occur in that way. It has manifested itself by seeing the business fall into a few hands in each market, but they are still independents. With the good stores, a $2 million business twenty years ago, is now a $15 million business. Will they remain innovative and well-versed in jewelry? That is the question.

  3. Ben, we have seen everything! The good days and the bad. I miss seeing you and those of us who were lucky enough to enjoy the glory days! I was reading some old articles I wrote for JQ years ago. Pushing things from 14 to 18K. Wonderful designs and such talent coming out of the US, Italy, France and Greece. Perfection in craft, delight in design. We were lucky! I was always upset by lighter, cheaper but you have to do what the market will bear. I could always find a way to cut a bit here and there but the demand to make something wonderful the public will buy is really out there. I remember pricing gold at $500. It could never go that high! It kept me from changing the retails every week! Oh, those were the good old days for quality chain. I miss looking at the bottom of a ring to see how it was made, I miss a business where a handshake was your bond, and I miss the sweet friendship of our industry. Jan Calass Nuckols Montgomery (

    1. Yes, it has changed a lot. But I still see designers, and even some volume manufacturers, producing great product. Cheap jewelry, often badly-made, boomed with the huge expansion of the mass market. Many of those consumers wouldn't or couldn't pay the price for what you and I might call "real" jewelry. Now, oddly, we see high-tech, high quality inexpensive jewelry using alternative materials serving that market.