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Merchandising In Hard Times

We asked retailers who’ve profited through earlier hard times what it will take to steer the course through X-mas 2008. Solutions and forecasts varied widely, but one constant was heard in each call: Calm voices advising, quite simply, to keep a steady hand on the wheel, and to go on dancing with the date that brought you.
Says Bill Underwood of Underwood’s Fine Jewelers, Fayetteville, Arkansas, “If I look at one thing we’re doing right now I’m happiest about, it’s a 30-minute infomercial we’ll be running a good 15 times through the season, on all three national networks. It’s our way of letting people know that we’re not just selling them jewelry. It shows our in-house gem lab, our bench jewelers, our custom creations, our knowledge and inventory of gemstones, and most of all, our honesty and integrity. So my first advice is to go on advertising. The worst thing you can do to a blind item sale in hard times is cut back on your message.”
What about diamond buying for the season? “Clearly, it’s time to be very cautious about outlays,” says Underwood. “We’ve had a very good year, but I’d be a fool to think that’s going to carry through the season. It’s even more crucial now to really know your market and to make sure you’re not just fully but correctly inventoried. We happen to have three of the most successful companies in the U.S. headquartered by us—WalMart, Tyson Foods, and JB Hunt Transport—but that doesn’t mean we’re a multi-carater business. So my second piece of advice is, get real about your market.”

Mike Warren of Warren Jewellers, Lancaster, Pennsylvania, a Hearts On Fire door, had the same advice, from the other side of the chain. “I just got back from Hearts On Fire University, and it was an eye-opener. There were a good 1,200 people, but when I had my chance to talk to Glenn Rothman, I was the only person in the room for him. On my end of the supply side, it’s the little things that keep the chain together. Like a customer who comes in to upgrade her center stone. If you take the old stone, and at no cost, fashion a pendant out of it for her, that’s service.”
As far as accommodating the harsh new realities for this season, Warren says he is moving from a 4C’s to a price points based platform. “That’s an easy value proposition for us, since we’re carrying a single brand.” Warren also moved from the old twice-yearly, show-oriented buying scheme to a yearlong platform five years ago, and feels that isolating the season to its own buying/selling stratagem is a mistake. “If you’re going to run out of three-prong studs on December 12, or the tennis bracelet or necklace that turns for you, you’re just not buying right.”
Distance from seasonal reliance is a sentiment shared by John Von Bargen, who has grown to four Vermont and New Hampshire Von Bargen doors in 30 years by always taking the high road. “We’ve had a good year,” he allows, “and a good season last year too, up 6 percent. A few months ago, I may have well hoped for up to 10 percent this season, but I’m no longer harboring that illusion. The thing is, it’s not that crucial for us. We don’t count on it for that x percent so many jewelers do, and we certainly don’t buy that way. We do Centurion and Couture, and the JA Show, but it’s year round, not seasonal or show-oriented.”
Staying the course is Von Bargen’s advice. “The big picture is a flight to quality, which is where I decided to position myself in 1982, when I got rid of 14k, went into 18k and platinum, and everyone thought I was just nuts. That was another panic year. Likewise, this troubled year, we’ve added a sales associate and a bench jeweler and continue to grow. Growth is greatly enabled by the fact that we moved on-line very successfully, to the point where it’s really now our fifth door.”
But while advising the same diamond buying caution, Von Bargen sees real opportunities in precious metals. “Platinum’s almost half of what it was half a year ago, simply because the auto industry’s hurt. And you know that’s not going to last. I also see a big return to yellow gold, particularly in fashion, and while gold’s hardly cheap, I think the day when gold played second fiddle to the diamond is coming to an end, and that we’re heading back toward the ’80s, when metal was king. Sounds odd, coming from an ideal cut guy, but you may want to shape seasonal buying as much, if not more, around the metals than the stones this year.” — Ivan Solotaroff

14k white gold semi-mount with 3/4 carats of round side diamonds
“Oriana” collection 14k white gold semi-mount with 3/4 carats of round side diamonds from Jewelex New York, suggested retail $1,799, (800) 208-9999.
14k white gold semi-mount with a 1/2 carat of baguette and round side diamonds
“Oriana” collection 14k white gold semi-mount with a 1/2 carat of baguette and round side diamonds from Jewelex New York, suggested retail $1,299, (800) 208-9999.