COVID-19 has placed the American jewelry industry in an untenable financial position. The looting of jewelry stores has added insult to injury and our heart goes out to those who have been affected. And with the late reopening of stores in some states, the crisis can linger for much longer than anyone would like.
You’re either opening up your store or have opened slowly over the past few weeks. A question currently on your mind is: “How do I get customers back into my store?” This is a valid question, and I can tell you the most sure-fire way to accomplish this is to run a major sale event.
The death of George Floyd in Minneapolis – an injustice all its own – has sparked outrage and vandalism in that city and across our country. Designer brands and jewelers have been among the main targets of looting, with destruction of storefronts and jewelry store interiors commonplace.
In reference to the challenges faced after World War II, it was Winston Churchill who first said, “Never let a good crisis go to waste.” The same might be said about the Coronavirus pandemic. No one planned for a Coronavirus crisis, but we must now face it head on as our businesses begin to reopen.
The COVID-19 crisis has devastated our medical community, and in some respects, has had an even greater impact on our economy. As the economy goes, so goes our jewelry industry. We need to get back to growing our businesses as soon as possible.
I’ve been writing to you a lot, trying to share creative and encouraging messages that resonate with the times we’ve all endured. But now that the tide is starting to turn and it’s time to start reopening our businesses, it’s vital that you get back on track quickly.
We are all continuing to suffer from the Coronavirus shut-down, but we see signs of flattening the curve and a time very soon when we can get back to business. This also means eventual recovery and a resumption of growth in our businesses.
The global pandemic has ushered in considerable concern and uncertainty to the marketplace and to each of us personally. That’s one reason why we want to stay connected with you and to communicate on a regular basis. While we remain at a distance from you and your stores, we want to stay close because we want to help you get through these difficult times.
Car dealers are offering months of no payments and free delivery of new and even pre-owned vehicles. Airlines are slashing prices on flights with the cleanest seats and main cabins we’ve seen. Restaurants are making deals on take-out and delivery to stay in business and retain their employees.
Like you, we are doing our best to navigate the current, unprecedented challenge that our country – and our industry – is facing. We have always considered ourselves to be The Fine Jeweler’s Strategic Partner, not only in good times, but also in times of adversity. We are here for you in this unusual time of business uncertainty.
The most consistent concern we hear from jewelers is the loss of traffic due to any number of factors, chief among them, the Internet. Most jewelers want and need to capture younger clients for bridal sales, and for future sales down the line. Most of these customers do their research online, and many shop online for gems and jewelry, largely because they can.
We speak with jewelers around the country every day and one of their biggest concerns is the decrease in store traffic. Part of the problem is that we’re all accustomed to shopping more and more via the internet, even if people aren’t necessarily buying jewelry online.
The tremendous focus on bridal over the past decade has created a huge problem in our industry. Opening orders of new bridal lines can bury you with numerous pieces that are extremely difficult to sell.
One of our recent clients wanted to set a new direction in his business. Though he built his business as a fine designer, he had gotten away from his core over the years by investing heavily in other designer-manufacturers. Frustrated and needing a change, he wanted to go back to his roots. So he called us to get some advice about steps he could take to rethink his business.
I came across the above sign the other day and asked myself, “What the heck does that mean?” Is it a construction sale where they’re selling construction equipment or construction materials, a sale because they’re under construction, or something else? Oh, and how does the American flag tie into this “construction sale”? I had no idea what message they were attempting to communicate here.
In my last message, I discussed the challenges of selling your store to an outside party. It is really hard to get anything close to what you might think the store is worth, even if someone could actually write you a check for it.
If you are at or approaching retirement age, you’ve probably considered selling your store. Unfortunately, retail jewelry store sales to an outside party are very rare today. It can be done, but most of those sales are modestly priced and include the storefront, the showcases, some equipment, possibly some aged inventory, and often the assumption of a lease.
I’m a big proponent of special events in your store. We find that those jewelers who do them – be they trunk shows, a lady’s night out, community charities, colored gem roundtables, or any such events – generate goodwill, excitement, and important sales in a month that may normally be just “so-so.”
As if there aren’t enough things to keep you up at night while running an upscale retail jewelry business, debt seems to be the one that causes the most sleepless nights. I’m not referring to long term debt such as mortgages or short-term debt with suppliers, unless your cash flow is so bad that you simply can’t keep up.
There is an almost ubiquitous belief in our jewelry industry that brick and mortar stores are a liability and that the growth of e-tailing is killing traditional retail. While online searching, shopping, and pricing has certainly impacted some areas of mainstream retail, the death of it is highly overrated.
I used to say that some things are done better as a team. Now that I’m a little older and a little wiser, I say that ALL things are done better as a team. There is no “I” in team, and that’s why building a great team is not only a key to success, but a key to succession.
We work with upscale jewelers around the country and every client has both similarities and differences. One of the major similarities is in their inventory. One $10,000,000 jeweler told me that the only difference between him and a $1,000,000 jeweler is an additional zero on his inventory level. He’s right.
Despite the corporate and individual tax cuts enacted last year, we hear a lot of reporting about reduced tax refunds this Spring. This tells us that retail jewelers are going to be hit two ways: The first is personally and the second is through less disposable income from customers.
The jewelry industry as a whole grew again in 2018, and a fair number of new businesses opened for the first time. But overall, the number of manufacturers, wholesalers, and retailers declined by about 4%, according to the Jewelers Board of Trade. A decline in brick and mortar stores, in particular, isn’t new to any of you, but there are a number of interesting things to consider as one looks at the industry landscape. Let’s look at a few of them.
The major jewelry shows are only a few months away, but do you really have an open-to-buy, and if so, for what specific items? Is your money tied up with current inventory on hand with much of it aging day by day? How are you going to make your showcases more exciting for today’s customers?
If there’s one comment I hear more than any other, it’s that store traffic is down. Jewelers obviously need more customers coming through the door. In this regard, I always advise upscale jewelers to have a gauge to measure store traffic on a routine basis because sometimes we think traffic is down when it really isn’t.
There is a degree of uncertainty in the marketplace and it is hard to pin down why. Corporate profits are still high, unemployment is still low, and the stock market had its correction, but seems to be settling back to a reasonable level. We know about the concern with China and a possible trade war, Europe and Brexit, and another threat to shutting down the Federal government again, but what does all this have to do with you as a retail jeweler?
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