I'll say the obvious to start. This has been a disorienting, and at times ugly, presidential campaign. The outcome for almost everyone is a totally unexpected result. We now face months of uncertainty as we watch to see what Mr. Trump actually formulates as policy. He has a Congress that is fully Republican, so unknowable change is a certainty (is any change a certainty anymore?). And uncertainty of that kind is destructive to business. Or even to a sense of balance and normalcy in our daily lives.
The election has taken some acknowledged problems in our country - notably the decline of the middle class, the deep-rooted disaffection with Washington, the widening income gap, and an angry working class that feels ignored and exploited - and made them the main direction of the country. In the process, business interests here and abroad are now at a loss of how to measure anything, as both political parties have been left in a shambles. Enough said.
So, if anyone has been wondering why business has been so rocky over the last year or so, we could, erroneously in my opinion, simply attribute it to the bizarre primaries and election. I have presumed for a while that the changes in the nature of business are not temporary, but based on fundamental changes in the population and in our common priorities going forward. Despite the pledges we have heard from President-elect Trump, we are not bringing back high paying, high employment manufacturing jobs, and we are not going back to those halcyon days, if there ever were any. Nor is there any way of reversing the deepening chasm between the highly skilled and educated tech-oriented classes and the rest of the country. Jobs will continue to be extinguished by automation, not just here but all over the world, China included.
What can we (possibly) say at this point about the jewelry business, which is like going from macro problems to micro problems. I'll take a shot at it, but please remember that we are only one day into the New America!
- The commitments of marital engagement will continue, and might even increase. In a time of stress, two people being mutually supportive is a plus.
- The diamond business as a whole, and especially in non-bridal, will become tougher.
- The public has been taught that costume is OK, that alternative materials are OK, that spending a lot less money to accessorize is OK. Unit sales may still not go up, but dollars and bottom line will go down. Retailer profits will be under increasing pressure. Suppliers will feel even more pressure.
- As a result, consolidation and business discontinuation will continue, especially among independents. Chains will reduce store count, and push the use of their web sites to drive customers to stores. That will be true at all levels of business, including the high-end luxury chains.
- Merchandising will narrow. SKU's will be cut. Retailers will further limit the number of vendors they use.
- Diamond prices may decline, and the legitimate use of MMDs (man-made diamonds) will accelerate. Gold may become more expensive if currency exchange rates become more volatile.
- Christmas 2016 may just have been dealt a serious blow. Any economic prognostications for 2017 are out the window for now.
This may all sound like relatively mild changes, and it does presume that Donald Trump will temper his proposed actions. We hear reconciliation in the first speeches after the election, but the rancor runs deep, and we may see a level of governmental malfunction unseen in our history. The undoing of open world trade will be a disaster matching the Great Depression. Imagine for a moment the effect we will see from high tariffs on all the jewelry we import from Asia and elsewhere. Should such things actually happen, all bets are off. All our retail, not just jewelry, is mostly built on imports. The prospect is truly frightening.
The election has taken some acknowledged problems in our country - notably the decline of the middle class, the deep-rooted disaffection with Washington, the widening income gap, and an angry working class that feels ignored and exploited - and made them the main direction of the country. In the process, business interests here and abroad are now at a loss of how to measure anything, as both political parties have been left in a shambles. Enough said.
So, if anyone has been wondering why business has been so rocky over the last year or so, we could, erroneously in my opinion, simply attribute it to the bizarre primaries and election. I have presumed for a while that the changes in the nature of business are not temporary, but based on fundamental changes in the population and in our common priorities going forward. Despite the pledges we have heard from President-elect Trump, we are not bringing back high paying, high employment manufacturing jobs, and we are not going back to those halcyon days, if there ever were any. Nor is there any way of reversing the deepening chasm between the highly skilled and educated tech-oriented classes and the rest of the country. Jobs will continue to be extinguished by automation, not just here but all over the world, China included.
What can we (possibly) say at this point about the jewelry business, which is like going from macro problems to micro problems. I'll take a shot at it, but please remember that we are only one day into the New America!
- The commitments of marital engagement will continue, and might even increase. In a time of stress, two people being mutually supportive is a plus.
- The diamond business as a whole, and especially in non-bridal, will become tougher.
- The public has been taught that costume is OK, that alternative materials are OK, that spending a lot less money to accessorize is OK. Unit sales may still not go up, but dollars and bottom line will go down. Retailer profits will be under increasing pressure. Suppliers will feel even more pressure.
- As a result, consolidation and business discontinuation will continue, especially among independents. Chains will reduce store count, and push the use of their web sites to drive customers to stores. That will be true at all levels of business, including the high-end luxury chains.
- Merchandising will narrow. SKU's will be cut. Retailers will further limit the number of vendors they use.
- Diamond prices may decline, and the legitimate use of MMDs (man-made diamonds) will accelerate. Gold may become more expensive if currency exchange rates become more volatile.
- Christmas 2016 may just have been dealt a serious blow. Any economic prognostications for 2017 are out the window for now.
This may all sound like relatively mild changes, and it does presume that Donald Trump will temper his proposed actions. We hear reconciliation in the first speeches after the election, but the rancor runs deep, and we may see a level of governmental malfunction unseen in our history. The undoing of open world trade will be a disaster matching the Great Depression. Imagine for a moment the effect we will see from high tariffs on all the jewelry we import from Asia and elsewhere. Should such things actually happen, all bets are off. All our retail, not just jewelry, is mostly built on imports. The prospect is truly frightening.
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