Friday, November 21, 2014

The news gets better for jewelry in America

I must admit that a range of activities and diversions have kept me from writing for the last couple of months.  My apologies to those who await my missives with bated breath.  No one has complained, I am sorry to report.

But, on the brighter side, maybe it is because everyone is busy with a good finish to the year.  I hope that is the case.  I have heard that to be the case as I begin to attend various year-end parties and meetings.  The pattern we have been seeing for the last few years seems to be continuing, and perhaps intensifying.  Some suppliers and retailers at the higher end of the jewelry market have already had a very good year, while those in the mid-market and lower end continue to struggle.

Part of that, of course, is a continuation of a long-standing fact about our industry.  There has always been more capacity to manufacture than there is demand, especially in the mass market.  In an era of growing income disparity, the problem is dramatically evident, and is compounded by constant pressure on margins.

But can we truly be gloomy about it, in the US at least?  Not really.  The economy is picking up steadily and that is bound to redound to many companies.  2015 could be a solid year.  Let's hope so.

Even so, I sense an odd mix of both malaise and optimism.  In the diamond business, dealers say that sales are tough - they cannot figure out why, at a time of generally improving conditions, they see such slow sales.  I would suggest that there is too much goods sitting and waiting for buyers; that it has now become a fully international business, which lowers the hit rate; and that many retailers have done a good job of buying from the public at much lower prices.  I suspect that it could take a long time for all that to stabilize.  It has clearly been reflected in the volatility of prices for loose stones, especially in larger sizes and qualities.  De Beers is no longer there to act as a buffer in slower times.  On the contrary, their push is to maximize prices as the depletion of major mines start to loom into view.  That is understandable from a purely commercial viewpoint - any of us would do the same - especially since all sources are essentially doing the same thing.

Meanwhile, while pearls have not returned to favor, colored stones are doing well.  Are pearls weak because of a broad-based change in consumer sentiment?  My guess is yes.  Selling pearl studs, or pieces with just one or a few pearls does not move quantity the way that strands do.  And strands, while real classics, are not hot.  At the same time, cultivation of pearls has boomed in recent years.

Manufacturers of colored stone jewelry, on the other hand, have shown great creativeness in capitalizing on the advantages in price and range of categories, especially in the use of plentiful varieties of quartz and other relatively inexpensive stones.  The perception of value and the ease with which stones can be mounted in any metal afford color the ability to meet critical retail price points.  Obviously, that is a real advantage these days.

Just in the last few weeks, speaking of optimism, I attended or participated in three events that bring a smile.  I was invited to view (and vote) on the submissions made by designers, mostly American, to the AGTA Spectrum Awards for 2015.  Here we saw a large collection of superb jewelry, hundreds of pieces that were marvelous displays of creative energy by first class artisans.  A pleasure to see, and a great tribute to the growing number of excellent designers we have here.  I do not envy the committee that had to review all these pieces and select the winners.  They were all winners.

Uptown from that great show was another show, the JA Delivery Show at the Javits Convention Center.  The contrasts there were fully descriptive of jewelry in America; vendors of very low cost mass produced lines aisles away from top quality American and foreign vendors.  I (unfortunately) had no trouble engaging with a number of exhibitors, as traffic was low the day I was there.  What struck me was the absence of prime jewelers.  While business was being written, there were vendors here that really should be seen by more retailers.  Again, as at the Spectrum Awards, some designers seek to find retailers willing to show the best.  I see this as a missed opportunity for any retailer to take the time to see "what is new."  In my opinion, trade shows are the best way for retailers to find excellent new lines, and too few of them are showing up.  It is the retailers, in the end, who will be hurt the most by not attending these shows.

On a Sunday morning, the MJSA (Manufacturers Jewelers and Suppliers of America) held their Confab at FIT (Fashion Institute of Technology), right here in New York.  About 100 people were registered for a full day of presentations covering various aspects of the jewelry business.  I had the first hour, and discussed current market conditions and then the process for creating a comprehensive plan for entering the US market.  While it covered many issues (all of which could easily take hours for full exploration), my focus was to suggest caution on reckless action, but also optimism about the future of the industry.  A key point was on how most entrants inadequately prepare to maximize their chances for success.  I have seen that all too often in my many years in this business.

Still, I find it so encouraging that even in the face of this long recovery from a deep recession, there are so many people, young and not so young, still excited about jewelry, and that I get a chance to see it all and to play a small role in helping to build future successes.