Magazine ranks Simmons Fine Jewelry 7th coolest jewelry store in the nation
Even Jay Simmons’ wife can’t escape the radio jingle so ubiquitously associated with their family’s Eagle Road jewelry store.
While shopping in a local department store, some women asked Stacey Simmons where her wedding ring was from. Her response was enough to make them break into song.
“Simmons Fine Jewelry,” they crooned. “Your wedding ring store … and so much more.”
But there’s more than a radio jingle to the Meridian jeweler, which moved into its 8,000-square-foot, custom-designed store a year ago. In August, the jewelry industry magazine Instore ranked Simmons Fine Jewelry No. 7 among America’s coolest jewelry stores — a distinction that has raised the profile of the Treasure Valley- grown business.
“It helps put us on the map with the who’s who of the jewelry business,” Jay Simmons said.
Simmons’ story is like a recounting of the Horatio Alger myth: He started in the jewelry business washing windows for $1 an hour at a store in Rupert, his hometown. Simmons gradually learned every aspect of the trade, including engraving and repair techniques, and opened his first store in 1989 at age 28 in Boise’s Towne Square mall.
Simmons’ new store, at 1220 N. Olive Ave., Meridian, is five times larger than the former Boise store. It employs 14 people and generates more than $4 million a year in sales, Simmons said.
The store houses 72 jewelry cases and the 300 linear feet of display area divide the wares by gem: sapphires, rubies, emeralds, topaz and pearls among them. Simmons also carries Breitling and Cartier watches (Simmons’ personal favorites), Seiko clocks and, of course, scores of wedding rings. A curved ceiling inlay mirrors the u-shaped main jewelry display.
A large wrought iron chandelier dangles from a recess above the entryway, shining down onto the Simmons logo inlaid in the tile floor.
In the wake of the Instore award, Simmons has received increased attention from jewelry vendors worldwide.
“We pretty much have everything we want,” Simmons said.
With two graduate gemologists and three custom jewelers on staff, Simmons does all its own custom work on-site in a basement lab. An ultra precise computer cuts the most intricate custom designs — from family crests to athletic team logos — into molds before they’re cast into metal. Simmons also started selling its own brand of diamonds, with a microscopic Simmons “S” (reminiscent of the Superman logo) laser-cut into the diamond.
“[The jewelry business is] exciting and I love it,” Simmons said. “I have a passion for it, and that’s why I’ve been able to do what I’ve done.”
It takes most families in the jewelry business at least a couple of generations to reach the size Simmons has, and he says it’s likely his children will take over the business some day.
He hopes to one day have the premier jewelry store in Idaho.
“Tiffany — they started just like I did,” he said.
man made JEWELRY
In the last two years, it seems as if the fine jewelry industry suddenly discovered men. Not that the industry hasn’t marketed to men all along. But selling men an engagement ring is proving to be much easier than selling them men’s jewelry.
While many independent retailers have carried cuff links for years, an avalanche of new collections has appeared. Most are dominated by alternative metals such as stainless steel, tungsten carbide, and titanium from companies like Edward Mirell, Triton, and Fibo Steel. Sterling silver is still a favorite, and brands like David Yurman and John Hardy have pursued the men’s business for years, making them leading suppliers. Designer lines, such as Robin Rotenier, Heston Designs, Catherine Zedah, and Konstantino have also been pursuing the men’s category.
Diamond “bling” jewelry has also found a following from low-carat versions in mall kiosks to steel and diamond jewelry from hip-hop impresario Russell Simmons, and high-end offerings from Chris Aire, Jacob & Co., and Rocawear. Some lines specifically target niche markets, such as Love & Pride, a collection aimed at gay men. Others, such as Cadillac Hammer and Chevron Royale, make no bones (skulls maybe) about pursuing rock and roll, chick-chasing straight guys who wouldn’t ever think of wearing a diamond.
Yet even with rising prices, 14k and 18k-even some 24k-gold is being offered in men’s collections. Some dinmond brands have introduced men’s higher end diamond looks including Hearts On Fire and Nikos. Gravure recently added men’s diamond bands and engagement and anniversary rings, some in green, white, and rose gold combinations.
Red carpet coverage today is likely to feature men’s as well as women’s jewelry. Hollywood icon Brad Pitt even co-designs his own men’s collection for Italian jewelry house, Damiani.
Even the most affluent of jewelers are taking on men’s jewelry. Harry Winston recently tapped menswear designer Thom Brown, recipient of the 2006 Council of Fashion Designers’ menswear award, to create a line of jewelry and timepieces scheduled for mid-2007.
This flurry of fine men’s jewelry-let alone trend jewelry sold in heaps at retailers such as H & M and Urban Outfitters-has garnered the attention of the media. What could be a more authoritative comment on the burgeoning market than The Wall Street Journal calling jewelry for men “the fastest growing sector in the fine jewelry industry.”
The Journal quoted Allen Steinmetz, CEO of Strategic Consulting, a New York marketing firm, who said that men’s jewelry is moving into the mainstream, along with shopping for premium denim or skin care lines. “Accessorizing with jewelry is part of all that.”
When Modern Jeweler recently asked readers whether they had expanded their men’s jewelry offerings and whether they expected future increases, more than 50 percent of the stores replied in the affirmative.
But many retailers, from independents to chains, also are saying they haven’t seen a dramatic pickup in sales of men’s jewelry. One buyer for a chain who picked up two new men’s collections says, “Yes, there are some sales. Would you call them important? Hardly. Men’s jewelry is still a small portion of the business.”
Buyers also admit there have been almost no marketing or advertising dollars devoted to men’s. “The truth of the matter is that we cannot afford to do that. High margin merchandise such as women’s diamond jewelry is too large and important,” says another buyer.
WHAT’S REALLY SELLING
The Wall Street Journal cites Tiffany & Co., which expanded from mostly cufflinks into rings, pendants, bracelets, and other classifications for men, as attributing 2 percent of the retailers total sales to men’s jewelry. Other industry estimates put all men’s fine jewelry sales at about 10 percent. When asked about sales of recently acquired men’s jewelry lines, many independent jewelers echo a small percentage range, usually between 2 percent to 7 percent.
“It may not add up to much yet,” says David Sherwood of Daniel’s Jewelers, Culver City, California, “but that’s more than before, which was basically nothing.” Indeed, Sherwood notes that the addition of men’s lines gives independents another reason for a man to come into the store, especially if the jeweler doesn’t carry watches.
Sherwood says alternative metal lines have been doing best, but only those with diamonds. “Anybody can go on eBay or the Internet and pick up a really inexpensive tungsten ring. As jewelers, you have to set yourself apart.”
Leo Hamel & Co. of San Diego jumped onto the men’s jewelry bandwagon by putting in Scott Kay’s sterling line. Like many retailers, Hamel’s Dano McCarthy says bracelets sell the best. “Men understand them because they are used to wearing a watch on their wrist. Also the popularity of the yellow Live Strong rubber bracelets has made men more aware of accessories in general,” says McCarthy. While a sale of men’s jewelry isn’t going to make Leo Hamels year, it offers opportunity for additional sales. “We have many women sales associates. If they sell a watch to a man, he listens if they then suggest a bracelet to go with it.”
Lou Guarino of Louis Anthony, Pittsburgh, reportedly has one of the largest Yurman men’s businesses outside of Neiman Marcus. Although Yurman and other brand names typically have fared best in specialty store settings along with menswear, Louis Anthony has cultivated its men’s clientele by example. Guarino always makes sure he is wearing cufflinks, bracelets, or other items in his store or at community functions. The same goes for his sales associates. This year he added Nikos, a line he says appeals to a younger customer but not “super flashy.” Bracelets sell well here, too, especially the Italian line Sauro where about 30 styles are offered in cases adjacent to fine watches.
WORKING MEN
Successes-and disappointments-in men’s jewelry run a gamut not unlike that found in women’s jewelry. What started off as a seemingly obvious attempt to capitalize on the “metrosexual” male has become much more complicated. In past years, a few dozen styles of cuff links would have been adequate to meet the demand. Today, however, the men’s business has become as complex as the women’s. Consequently so has the marketing.
“It takes time to build a men’s business,” says Craig Marinovich of Coeur de Lion. The men’s business usually begins with a store suggesting that the bride purchase an item for her intended. Marinovich has also opened his own gallery where he has discovered first hand the questions male consumers have about jewelry. “We have been experiencing a growing business in specialization for men. This is something new. The male customer wants to know how you can make his pieces specialized and individual and they are willing to pay more to do that. They are demanding and paying closer attention to the details of the piece. There’s a barrier that has been broken, and that’s good.”
One of the greatest changes, and thus challenges, in the men’s market is the new acceptance of diamond and other gemstones in jewelry. Obviously this trend has much to do with the influence of popular culture, particularly professional athletes. When American men’s greatest role models and heroes, athletes, can remain masculine icons while wearing diamonds, the trickle down theory applies. That’s why so many sterling, steel and alternative metal lines use diamonds, albeit small and discreet, in lines aimed at the American male.
The difficulty in some cases is that if a man wears diamond jewelry, his wife or girlfriend or significant other is going to request some diamond jewelry that’s equally significant. Simon G., which has sold men’s 18k gold and diamond rings, found that there’s a glass ceiling on many men’s diamonds, about $2,000. Higher than that and “you are daring the wife to say where are my diamonds.” It may be an amusing situation, but it happens everyday, even to the most affluent of customers who can afford to spend more than $2,000 on men’s diamond jewelry.
Chris Aire, who has made his name selling diamonds to professional sport athletes and entertainers, says he believes that many of the stories about men’s jewelry have been exaggerated. “There’s a learning curve needed in men’s jewelry. You have to learn how to sell it, attract the customer, and promote it.” Some of Aire’s collection has price points that rival major women’s diamond jewelry. But that hasn’t necessarily been a problem. “Whatever he spends on himself, he is going to have to spend even more on her jewelry.” Consequently, Aire and other brands have expanded into women’s diamond jewelry, reversing the trend where women’s jewelry lines are introducing men’s collections.
Robin Rotenier started his business a little more than 10 years ago and found its niche with novelty cuff links, mostly silver. Since then he has built a large men’s business with stores such as Neiman Marcus. He now has an extensive line of women’s jewelry too.
Retailers that are successful today in men’s jewelry began about a dozen years ago, Rotenier says. “It’s been a gradual movement up and stores such as Neiman Marcus, Bergdorf Goodman, Mitchell’s, and others have been on the forefront of growing men’s jewelry.”
When Rotenier began it was during the emergence of casual Friday. However, the pendulum has now swung back with more emphasis on tailored clothing and French cuff shirts, even if they are worn in a more casual way. “Today you can find French cuff shirts at Banana Republic or Bergdorf,” Rotenier says. His average price points reflect the general trend toward more expensive and better men’s furnishings. “When I started out my average ranged from $165 to $235 at retail. Nowadays stores can sell cuff links at $300 to $500 without resistance.”
Rotenier says that the recent rash of men’s launches is a welcome sign. He warns, however, that retailers deciding to expand into men’s use caution. “The worse thing a retailer can do is jump into the men’s business and try to do everything. By adding too many materials, looks, and classifications, you can choke a store and confuse a customer who may not be familiar with the array in men’s jewelry.”
That’s the philosophy that has worked at better specialty stores which often have an advantage over independents in the men’s category. Besides the fact they have a jump start on selling men, often with branded merchandise, they have the clothing that demanded the finishing touches that jewelry provides. “If a man spends several hundred up to several thousand dollars on a suit, then shirts and ties, the cufflinks and other jewelry are comparatively inexpensive.”
A specialty store that has capitalized on its ready to wear business to leverage men’s jewelry is Stanley Korshak, the Dallas-based emporium for affluent consumers. The store has a strong tailored menswear business, more on the conservative side. Yet customers here often spend thousands of dollars for suits, custom shirts, and furnishings. The addition of cuff links and other men’s jewelry is a natural. Buyer Greg Ranallo says that as his customers have traded up in their tailored menswear, so have they in their jewelry and accessories. Although much of his cufflink business is in the $300 to $500 range, mostly sterling silver, “clients are moving upward. We are selling more cufflinks in the $3,000 to $5,000 range, including white and rose gold versions.”
This fall the store will see if a similar correlation can be made when it opens its 12,000 square foot addition which will include premium jeans, designer sports, and more casual items. Ranallo is adding jewelry to complement the “upscale casual” look of the ready to wear with lines such as Cadillac Hammer, Me & Ro, Kerry McBride, and King Baby. “There has been a demand for more casual jewelry such as pendants, which our customers have even been layering.”
THE MALE MYSTIQUE
Whether you attribute the rise of men’s jewelry to hip-hop stars, ball players, or Madison Avenue, the truth is there has been a dramatic change in the way products are marketed and sold to men. In the years since the overused term “metrosexual” emerged, Madison Avenue and other marketers have found they missed the mark in portraying the “metrosexual.” It’s a lesson that jewelry designers and retailers ought to heed.
A recent article in Business Week stated that Madison Avenue is turning its back on the metrosexual concept, one which it has been marketing ad nauseam for five years. According to a study by Leo Burnett Worldwide, men rejected the metrosexual image. They also rejected the retrosexual type as well: beer guzzling, good old guy portrayals. “Men have been portrayed as buffoonish, sophomoric or as sensitive, feminized men. The bulk of the men are somewhere in the middle,” says a spokesman for Burnett. “About 79 percent say they can barely recognize themselves in any advertisement.”
There’s danger in presupposing what a 21st century man is, as in prejudging a typical woman client. Moreover, there’s a societal change going on. Most products have traditionally been marketed to and thus bought by women. That is changing, especially in younger generations who grew up with women in more equal and stronger positions. Also, their parents, the baby boomers, tended to treat these young men more as equals. Consequently, shopping patterns have dramatically changed.
GQ, for example, found that 84 percent of men purchase their own clothes, up from 65 percent just four years ago. Moreover, 52 percent of retailers surveyed said their “typical male customers shopped at a store at least once a month, up from 10 percent in 2001.” Add in that skin treatments for men (women call it beauty) have exploded-800 new men-only products were introduced in this year alone. There’s also a growing market for single men to buy homes since they are getting married later.
All these factors can seem daunting when applied to the jewelry business, where there’s already a dearth of authoritative consumer information. The good news, nonetheless, is that men indeed are interested in buying for themselves, taking care of themselves, and shopping for themselves. The other side of that is that selling and marketing something as personal as fine jewelry is just as complicated as selling jewelry for women.
Tips for Online Jewelry Shopping to Avoid Buyer’s Remorse
JEWELRY TOPS the wish lists for more than a quarter of consumers this holiday season, according to the National Retail Federation. And some of the biggest bargains can be found online — if you don’t get ripped off.
Shoppers are growing increasingly at ease buying bling online. While in-store jewelry sales have been growing roughly 4% a year in recent years, online sales have risen on average 20% a year over the past five years, says industry analyst Ken Gassman of Richmond, Va. Online jewelry sales are expected to rise to $2.2 billion this year from $1.7 billion in 2004, according to Jupiter Research, out of the overall $57 billion jewelry industry.
Whether buying from a national chain or an individual seller, the first step is always research. Few consumers “really know what a fair price is anymore, and there is often high buyer’s remorse,” says John Baird of Blue Nile, a big online jewelry retailer.
Diamonds should be certified by independent labs like the Gemological Institute of America or the American Gem Society. Both also offer tips on buying and evaluating diamonds and gemstones at their Web sites gia.edu and americangemsociety.org. Insist on viewing the certification before you purchase. A reputable company should be willing to email a PDF.
There are a few other online resources that steer you through terminology and pricing. Bluenile.com offers a “build your own ring” tool that lets you test possible combinations of diamond cuts and settings, while explaining the lingo. The site also has a broader “education” page of jewelry-related primers. EBay, the auction Web site, also offers a sprawling array of educational tools and specialized information at reviews.ebay.com; click on “jewelry & watches,” located part-way down the page.
But while eBay can be a valuable resource for research, when it comes to shopping there, be careful before buying: Individual sellers have come under fire in the past for trafficking in knockoffs. In 2004, Tiffany filed a lawsuit against eBay related to claims that eBay wasn’t delisting sales of counterfeit Tiffany products. The lawsuit, filed in Manhattan federal court, is still pending.
Officials at eBay (which offers thousands of pieces, ranging from Mickey Mouse watches to estate jewelry) acknowledge scams are a possibility and caution consumers to research a product and its seller. “You have to be careful,” said Sandra Graham, an official at the company. Avoid sellers with positive ratings below 99%, as well as those that don’t provide a physical address or a telephone number.
No matter where you shop, apply the common-sense rule: If it looks too good to be true, it probably is.
After the jewelry arrives, take it to an independent appraiser — not a jewelry store — for a second opinion. (Jewelry stores may have an incentive to argue the item was overpriced in order to make a sale of their own.) For about $50, an appraiser can examine the piece and make sure you didn’t overpay. For big purchases, the appraiser’s valuation might be important for insurance, too.
As branding and counterfeiting proliferate, urge jewelry consumers to keep it real
NEW YORK-The increase in branded, designer baubles has strengthened demand for fine tiffany & co jewelry as a fashion accessory and self-purchase, leading to increased margins for retailers.
But the transition into a brand-oriented industry has also caught the attention of counterfeit manufacturers who for years have profited from the sale of fake watches, handbags, sunglasses and other luxury goods. The ease and anonymity of selling counterfeit goods online has also fueled the illicit jewelry trade.
“Jewelry counterfeiting is on the increase, for sure,” says Valerie Salembier, senior vice president and publisher of Harper’s Bazaar.
For the past two years, Salembier has spear-headed the magazine’s anti-counterfeiting campaign, “Fakes are Never in Fashion,” in an effort to educate consumers on the $600 billion global counterfeiting industry. Campaign partners include executives from luxury companies and government officials worldwide.
“If our readers knew where the money went from the sales of counterfeit goods, they would never buy them again,” Salembier says. “The money unquestionably funds terrorist groups, drug cartels and child labor-one of the most egregious crimes in human history.”
One of the best ways to keep consumers from buying fakes is for retailers to explain the “human toll” they take, Salembier says, but of course, there’s a monetary toll too.
American companies lose some $250 billion annually to intellectual property theft, and worldwide, retailers lost $512 billion in sales last year to counterfeit goods, according to the Fakes are Never in Fashion campaign.
In addition to explaining to consumers where the proceeds from counterfeit goods go, retailers must also educate them to recognize that counterfeit goods are of inferior quality and are not covered by manufacturers’ warranties, Salembier says. She suggests keeping a counter card stating “We authenticate all branded merchandise” as a means of starting a dialogue with consumers, adding that retailers can simply explain that fine craftsmanship and high-quality materials mandate higher prices for genuine goods.
Counterfeit goods are generally manufactured in Asia, imported to the United States and sold online or in tourist areas like New York’s famed Canal Street (where several recent counterfeit busts have occurred) or Los Angeles’ Santee Alley. But sometimes the goods also appear in legitimate key rings jewelry stores.
Each retailer is responsible for ensuring that all the products sold in their stores are genuine, says Cecilia Gardner, president and chief executive officer of the Jewelers Vigilance Committee. Manufacturers can take legal action against retailers simply for selling counterfeit merchandise made elsewhere.
Gardner recommends that retailers request all suppliers furnish their license to produce branded products and make sure the goods bear the proper trademarks.
Some high-profile retailers and manufacturers, including Cartier, Tiffany & Co.necklaces and David Yurman, have also gone to court to combat counterfeiters.
In August, Tiffany was awarded $1 million as part of a court settlement that also enjoined Starglam and its principal, John Shamir, from producing what the retailer alleged was counterfeit Tiffany merchandise.
Tiffany has also filed a civil lawsuit in New York federal court against Internet auction site eBay, alleging the company allowed the sales of counterfeit merchandise. EBay representatives did not return phone calls seeking comment.
“Trademark counterfeiting severely damages brand owners and consumers alike,” says Tiffany Chairman and CEO Michael Kowalski. “The way to stop it is to take aggressive action against the counterfeiters and to make them pay, criminally as well ascivilly.”
Tiffany & Co. and Other Top Jewelry Firms Looking to Hire at July 26 Career Fair in New York
In fact, the Institute currently has more than 400 positions in its job database.
In addition, hiring representatives from some of the gem and jewelry industry’s top firms will be offering positions to qualified job seekers at GIA’s annual Jewelry Career Fair July 26 in New York. Bulgari, Chanel, Christie’s, David Yurman, Henry Dunay Designs, Lux Bond & Green, Tiffany & Co., and Zale Corp. are among the more than 50 firms expected to participate in this year’s event, according to GIA’s Career Fair planners.
“We’re very excited to find people who are looking to be sales associates, assistant managers and store managers for the Manhattan area,” said Leesa McElroy, manager of staffing for Zale Corp. “Career Fair is perfect for us.”
The event features panel discussions and career counseling with many of the jewelry industry’s leading executives and noted experts in areas such as jewelry sales, manufacturing, and design. Renowned designer Henry Dunay — whose exclusive designs are carried by Neiman Marcus, Saks Fifth Avenue, and others — will be one of the featured panelists in the “Working to Win” session. Marc Dorio, author of “The Complete Idiot’s Guide to the Perfect Interview,” will present a workshop on interviewing skills.
Some 1,100 job seekers participated in last year’s event, including Sarah Cheng — who secured a graduate jeweler gemologist designer position with upscale jeweler Lux Bond & Green in Uncasville, Conn., as a result of Career Fair.
“Attending Career Fair was a very important step to me because it literally opened the door to the career I’ve always wanted,” said Cheng, a native of Taiwan who earned her Graduate Jeweler Gemologist diploma from GIA.
Jewelry Career Fair, founded by GIA and The 24 Karat Club of Southern California, is sponsored by The VNU Jewelry Group. The event opens at 9 a.m. — with recruiting beginning at 10:15 a.m. — and concludes at 3:15 p.m. It will be held at the Jacob K. Javits Convention Center, Lower Level E Hall, on 11th Avenue (between 34th and 39th) in New York. For more information, call GIA’s Jewelry Career Fair hotline at 800/421-7250, ext. 4100, visit www.careerfair.gia.edu or email careerfair@gia.edu. Admission is free to job seekers.
About GIA
An independent nonprofit organization, the Gemological Institute of America (GIA) is recognized as the world’s foremost authority in the grading and identification of diamonds, gemstones and pearls. Established in 1931, GIA has translated its expert knowledge into the most respected gemological education available. In 1953, the Institute created the International Diamond Grading System(TM), which, today, is recognized by virtually every professional jeweler in the world. Through research, education, and gemological laboratory services, the Institute is dedicated to protecting the interests of both the public and the jewelry industry alike.
Jewelry loses its sparkle; stores pare their prices
During the last three decades, Robert Lee Morris has built a reputation for distinctive gold and silver bangles jewelry designs that fetch hundreds of dollars.
This year, though, he’s trading down. Hurt by Sept. 11 and a sluggish economy, the Manhattan designer has launched a new collection priced 33% to 40% below the cost of his other designs. Now, consumers can scoop up a sterling silver Robert Lee Morris creation at his SoHo store for as little as $100, and the line is being shipped to other retailers.
“These prices make it easier for customers to buy into the Robert Lee Morris brand,” says company President Edward Deutsch. “It’s a reaction to the marketplace.”
Heading into the fall and holiday seasons, when rings jewelers generate up to 70% of annual profits and sales, vendors and retailers across the city are deploying defensive strategies. With hopes dimming for a second-half retail rebound, they’re trying to make the best of what’s shaping up as a tough stretch.
In addition to offering affordably-priced merchandise, jewelers are upping marketing efforts, while taking care to hold inventory levels flat with last year’s. The current gloomy atmosphere follows an exceptionally strong decade for the $40 billion fine-jewelry industry. After the 1991 recession, jewelers racked up big sales gains, culminating in a banner 1999, when millennium-mad shoppers splurged on baubles for their loved ones.
Spaced out
The boom encouraged new players. Zale Corp. entered Manhattan with three stores last year, and Chanel opened a freestanding jewelry boutique this spring. Even now, expansion continues. A new 4,000-square-foot H. Stern store in SoHo and a major expansion of Asprey at the Trump Tower are on tap.
The growing crowd runs counter, though, to recent consumer spending trends. Even before Sept. 11, jewelry customers had already curtailed their spending. With 21% of total wages in the city directly tied to the flagging fortunes of Wall Street firms, local stores are particularly vulnerable to further consumer cutbacks.
Worries about the economy and the job picture are already prompting lowered ratings on the stocks of publicly traded specialty jewelers Zale and Tiffany & Co.
“Spending money on something special is not going to be a common feeling if the market continues to wobble erratically,” predicts Wendy Liebmann, president of WSL Strategic Retail, a marketing and retailing consultant.
To protect its market share, upscale Fifth Avenue jeweler H. Stern has increased its marketing budget by a third. This October, its first U.S. image campaign will break in major magazines, including Wand Vogue.
It’s also switching tactics. In the past, H. Stern only showed products in its advertising, but this year, it hired noted photographer Michel Comte to create fourpage spreads of feel-good images shot in the south of France, featuring an attractive couple adorned in H. Stern pendants jewelry.
“It’s all a consequence of Sept. 11, wanting to put a positive spin on everything,” says Andrea Hansen, marketing director at H. Stern. “It’s a good way to position jewelry as an element of happiness.”
Nonetheless, H. Stern is playing it safe. It plans to keep inventory levels constant with last year’s.
For Bloomingdale’s, tight inventory control is also key-as are lower-priced items. Just after Sept. 11, the store increased the jewelry space at its 59th Street flagship by 60%. Inexpensive lines such as Carolee have been given more room.
Prices range up to $900, but most purchases are between $50 and $60, according to Francine Klein, senior vice president of fashion accessories and cosmetics at Bloomingdale’s. The relatively low price makes jewelry a pick-me-up that even the most nervous consumers can afford.
Hoping for silver lining
Despite the big rise in selling space, Ms. Klein says that sales plans are “not as aggressive as in the past.”
Many local jewelers have similarly toned down their former sparkling outlooks for second-half revenues. Merrill Lynch analyst Mark Friedman recently reduced his rating on Tiffany to “neutral” from “buy.”
At this point, all jewelers can do is hope that their new strategies, combined with starfish necklace jewelry’s enduring appeal, will be enough to salvage the season. Jewelers must also contend with new hurdles that the new strategies bring. For Robert Lee Morris, this means generating higher volume to offset the lower prices.
The company’s Mr. Deutsch expects that extra marketing, thanks to a partnership with the World Gold Council, will provide a lift.
“It’s very competitive,” Mr. Deutsch says.
As experienced online shoppers grow bolder, sales of jewelry online show a spurt in growth.
AMONG the pleasant surprises for Internet retailers early in this holiday shopping season, perhaps none have been as surprising as the showing among online jewelers. According to ComScore Networks, which measures Web traffic, sales for online earrings jewelry sites in November exceeded $80 million, nearly 70 percent above the level for November 2001.
”We’re really starting to see some good growth there,” said Shawn Milne, an analyst with Soundview Technology Group, an investment firm. ”Customers are getting over any issues they might have had with buying something of that price online.”
The idea of selling jewelry online always sounded enticing since it involved high-margin goods that could be stored in small warehouses and be shipped more easily than a couch, say, or a cantaloupe. Mr. Milne said shipping costs for online jewelers could be as low as 5 percent of sales, compared with 10 percent on average for Web sites that sell other goods.
Even so, Jewelry.com, Miadora.com and many other failed online jewelers found that no matter how much they spent on marketing, consumers were simply not ready to trust them with a $5,000 sale.
That tide is starting to turn, as ComScore’s statistics show. Analysts said that more experienced online shoppers were growing bolder about high-priced purchases as they graduated from buying books and CD’s to computers and other electronics items, and that they were now making the next step, to cars and diamond bracelets. Online retailers deserve some credit as well: online jewelers that did not spend their way to oblivion during the Internet boom years are creating a track record of trustworthiness.
Take Blue Nile, which rolled out in 1999, and which analysts agree is the market leader. The company, privately held, is on pace to reach about $70 million in sales this year, according to its chief executive, Mark Vadon. The company achieved outright profitability in the third quarter, he said, after 12 straight quarters of operating profits.
Unlike some other online jewelers and luxury goods sites, Blue Nile caters mostly to men — the bulk of its sales come from custom-made engagement rings. And since, as Mr. Vadon said, ”there’s a large segment of men who really don’t understand what they’re buying when it comes to engagement rings,” the site puts a premium on education, with extensive tutorials on evaluating diamonds and designing rings.
Such guidance is paying off, Mr. Vadon said, with rings selling for an average price of $5,200, versus the national average of about $2,200, and carrying an operating profit margin of about 8 percent. Blue Nile’s customers do have their limits. Most will order online even for more expensive pendants, Mr. Vadon said, ”but once they get above $20,000 or $30,000, they’ll call in” to complete the sale. A human voice on the phone still makes a difference during life’s crucial moments, apparently.
Mr. Vadon said Blue Nile could sell rings for at least 20 percent less than retail stores largely because it is the exclusive Internet retailer for 11 of the world’s largest diamond manufacturers. ”So while they’re out trying to sell to all the retailers out there, we’re selling their diamonds directly to consumers,” he said. ”Since we’re their largest customer, we get compensated with lower prices.”
If Blue Nile finds continued success with its engagement ring strategy, it can also thank the forbearance of Tiffany, the largest marketer of premium-price diamonds. For now, at least, Tiffany is not an online competitor to Blue Nile. According to Mark Aaron, a Tiffany spokesman, the Tiffany.com Web site sells more than 2,400 products, but it will not sell diamond engagement rings.
Rather, Tiffany.com introduces customers to several different ring styles and lists a range of prices. If users are interested in buying, the site encourages them to visit a Tiffany retail location, of which there are 47 in the United States. Mr. Aaron said that strategy was meant both to protect Tiffany’s brand reputation and to ensure that Tiffany attracted customers to its stores, where, he said, they spent more money over time.
At the core of Tiffany’s brand, Mr. Aaron said, is the notion that the company provides better service than its peers in the jewelry industry. The level of service an engagement ring customer can receive in a Tiffany store cannot be matched online, he said. ”And if they come to the store,” he said, ”hopefully we can establish a long-term relationship with that customer.”
Mr. Aaron said that Web sales of any sort accounted for only ”a few percent” of Tiffany’s Money Clips overall revenue of $366 million last quarter. ”There are people who spend many thousands on jewelry on the site, but they come to the store and spend hundreds of thousands,” he said.
For so-called pure-play online jewelry merchants other than Blue Nile, business is also becoming more steady. Ice.com, which was formerly part of the free-spending Internet incubator Idealab, is now independently owned and has achieved net profits for the last year and expects total sales of about $15 million in 2002, said Shmuel Gniwisch, the site’s chief executive. Mr. Gniwisch, who founded the company, said November’s sales were triple those of a year earlier, ”and expenses haven’t gone up more than 10 percent.”
Money was apparently less of an object in 2000, when Idealab merged Ice with another of its Internet properties, the online cosmetics site Eve.com. Mr. Gniwisch said Idealab had planned to roll out the combined sites under the Big.com domain name, for which it paid $3 million.
”Then they did a poll and found that 80 percent of the women thought Big.com was a porno site,” Mr. Gniwisch said. ”I told them to open a porno site. At least you’ll have one business that makes money. Coming from a rabbi, they didn’t think it was a great idea.”
Now out from the Idealab umbrella, Ice.com is in expansion mode, but with more modest ambitions. Earlier this year the site acquired the inventory and name of Service Merchandise, the failed combination store-catalog operation that had been in business for 41 years. Ice.com opened ServiceMerchandise.com last week. It will rely mostly on inventory from Ice.com, which will continue to operate as a separate site.
Mr. Gniwisch said he originally thought Service Merchandise would be valuable only for its customer list. ”But we looked into it deeper and knew we could do something more with it,” he said. ”Everybody I’ve ever spoken to has been a shopper at Service Merchandise, and jewelry was more than half of their business.”
Mr. Milne, the Soundview analyst, said that he was not sure how much value could be squeezed from the Service Merchandise brand but that the emerging success of the online jewelry category in general showed that consumer e-commerce had staying power.
”The old Internet models are long gone, but those who are left, and have found niche businesses that don’t compete with Amazon or eBay, are working well,” Mr. Milne said. ”We continue to sift through the rubble to see if there are any interesting names because the consumer Internet trends are very strong.”
Akron, Ohio-Based Jewelry Retailer Saw Stronger
There were some unexpectedly bright spots among Ohio retailers this holiday season.
One of the the most sparkling performances was that of Akron- based jewelry retailer Sterling Inc. and its London-based parent company Signet Group Plc. Signet shares, which trade on the London Exchange, posted their biggest gain in more than nine years after the owner of several mall jewelry chains, including Kay Jewelers and Osterman, said full-year earnings will increase and beat analysts’ forecasts due to stronger-than-expected holiday sales.
Signet, which competes with Zale Corp. and Tiffany & Co. in the United States, said pretax profit will rise from last year’s $293.8 million. Analysts had expected profit to be little changed after cutting their estimates last month.
The London retailer is gaining market share in the United States, where it has about 7 percent of the specialty tiffany & co jewelry market, 1 percent behind the market leader, Zale. Sales in U.S. stores open a year or more rose 4.7 percent in November through December, compared with gains of 1.3 percent at Zale and 1 percent at Tiffany. Same- store sales are considered the best sign of a retailer’s health because they disregard store openings and closings.
“It’s a stunning U.S. performance and does show the strength of that business,” said John Baillie, a retail analyst at SG Securities.
The retailer’s sales benefited in part from increased spending on training, advertising and store upgrades, said Signet chief Terry Burman.
Hudson-based Jo-Ann Stores Inc., a leading national fabric and craft retailer, reported that December same-store sales increased 13 percent versus an 11 percent same-store sales increase in December of last year.
Year-to-date same-store sales increased 8.8 percent, versus a same-store sales increase of 5.5 percent for the same period last year.
The key drivers behind the strong December same-store sales performance were continued strength in Jo-Ann Stores’ core businesses, particularly sewing and home decorating, as well as heavy Christmas seasonal product sales late in the month, aided by end-of-season promotional pricing, the company said in a statement yesterday.
Jo-Ann Stores raised its earnings estimate for the full fiscal year by 15 cents per diluted share based on the strength of the December sales performance. The company now expects fiscal 2003 earnings per diluted share of $2.15 to $2.25. This revised guidance is predicated on a same-store sales growth assumption of 6 percent for the fourth quarter.
Columbus-based Big Lots said sales at stores open at least a year jumped 10.1 percent for the four weeks that ended on Dec. 28. Toys, holiday items and home furnishings led the growth, said the company, which reports sales for a different period than most retailers.
Overall sales were up 15.3 percent, the company said.
Teen retailer Abercrombie & Fitch, based in the Columbus suburb of New Albany, didn’t fare quite as well as many Ohio retailers. Same-store sales were flat for the five weeks that ended on Saturday, but overall sales were up 19 percent. Based on the results, the company is now saying cufflinks for the quarter will be higher than projected.
But girls clothing retailer Limited Too, also based in New Albany, said it expects earnings for the quarter to be below expectations because of weak sales that led to significant markdowns. It is expecting same-store sales to fall about 10 percent to 11 percent for the quarter.
The Associated Press and Bloomberg News contributed to this report.
Credit: Akron Beacon Journal, Ohio
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Gemological Institute of America; GIA Jewelry Career Fair & Open House to Unveil the Balboa Park Carousel Egg
GIA’s Open House takes place only once a year. This time, GIA is showcasing the incredible Balboa Park Carousel Egg, a large Faberge-like mechanical wonder that is an artistically intricate, bejeweled miniature reproduction of the Balboa Park Carousel. The Egg is an exact replica of the Balboa Park Carousel, prior to restorations, including the 56 hand carved carousel animals, detailed paintings, lights, trimmings, coloring and other features. This will be the Balboa Egg’s first public viewing.
When the Egg is wound 34 times, it plays a repertoire of 20 songs from the late 1890s. Like all of the pieces on the Egg, its music mechanism was created by hand. The Egg took 18 years to create and its nearly 5,000 pieces are made of platinum, gold, sterling silver, diamonds and red enamel. It weighs 80 lbs. The Egg itself stands 10.5″ when closed, 13.5″ when open, with an 8″ diameter. With its 8″ base and music stand, the Egg stands a total of 27″ tall.
“It is an absolute privilege to have this magnificent Egg displayed at the Institute for the very first time,” said Elise Misiorowski, GIA Museum director. “This piece is a part of San Diego’s history and we are honored to have it in our Museum to share with the public.”
The Balboa Park Carousel Egg was commissioned-sponsored by Dr. Barry Marfleet, and designed-sponsored by Jim Grahl of J. Grahl Design. Grahl’s studio provided the environment for a team of artists and experts to work together to bring the Balboa Park Carousel, a classic carousel that has stayed largely the same since 1895, into a different form of art now finally available for public display.
Grahl said, “It brings me great pride in seeing this piece completed and here now for others to enjoy. My hope is to inspire in others the creativity, determination and the willingness to become part of a team, which are attributes people need to create anything of value.”
The GIA Jewelry Career Fair is happening on the same day as the Institute’s Open House. This is the gem and jewelry industry’s largest and premier recruiting event. It attracts up to 1,000 attendees, as well as prominent gem and jewelry companies such as Tiffany jewelry & Co., Zale Corp., and Ben Bridge Jeweler.
It is an important and unique opportunity in the jewelry world for both job seeker and employer to meet in one day, in one setting, with some of the industry’s biggest names giving seminars and providing coaching on how to garner success in the field.
Attendees will also be able to view over 30 pieces of jewelry and gems from the Facets of GIA exhibit which is an overview of the Institute and its history. Classroom demonstrations will also be happening throughout the day so visitors can learn more about gems and gemology as they tour the Institute.
The GIA Jewelry Career Fair will be an all-day event happening on Friday, Sept. 12, from 8:30 a.m. to 3 p.m. For more information, visit, www.careerfair.gia.edu.
GIA has two Career Fair events every year, held on both coasts; in the summer in New York and the fall in California. GIA’s Jewelry Career Fair was founded by GIA and The Jewelers 24 Karat Club of Southern California. The prime sponsor for the New York Career Fair is The Nielsen Jewelry Group, and the prime sponsor for the Carlsbad event is The Jewelers 24 Karat Club of Southern California and joining as a sponsor is the JCK Publishing Group.
Keywords: Gemological Institute of America.