Our industry has enjoyed two full years of increased prosperity, an amazing outcome resulting from the awkward and even devastating consequences of the COVID pandemic. 2021 was arguably the best year for retail jewelers in decades.
Unfortunately, most have experienced a marked slowdown in sales and profitability over the last few months. The Fed is trying to tighten money with increased interest rates to help curb inflation. At the same time, the Fed is walking a fine line between slowing the economy and trying to keep the country from falling into recession.
This leaves most of us scratching our heads trying to figure out what this will mean to retail jewelry sales in the second half of 2022, and especially during the holiday season. Obviously, none of us has a crystal ball to know the near or longer-term outlook.
Liquidity is the key to success in these uncertain times. Economists and businesspeople have always warned us to keep inventories low and keep cash on hand in such times. For many jewelers, a good percentage of sales are now coming from custom made pieces and not from the showcases. So how much showcase merchandise do you really need? Lower inventory levels add to cash flow and liquidity. This is the best way to weather the storm that may lie ahead. A major sale event in uncertain times can assure you of a strong finish to the year, while adjusting inventory levels to what they should be in cautionary times. Contact us for more information about how we can help you reduce unwanted merchandise, generate cash, and strongly position your store to deal with a slowdown in the economy.
Jeff Gordon, CEO