Editor’s Note
This article examines how the fine jewelry industry is navigating current economic headwinds, drawing lessons from past downturns while adapting to new consumer behaviors.
This year’s economic news has been unsettling: bank failures, a possible recession, rising interest rates, inflation, and, yes, the seemingly never-ending post-pandemic fallout.
The fine jewelry industry—which saw record sales in 2021 and 2022, when the pandemic prevented consumers from spending on dining out, travel, and other experiences—has been bracing for a reckoning. After all, the Great Recession of 2008 is still clearly etched in jewelers’ memories, as is the fact that it took more than five years to bounce back to pre-recession levels, according to the U.S. Census Bureau Monthly Retail Trade Survey.
The National Retail Federation’s (NRF) monthly economic review in June acknowledged there are conflicting economic signs, but described the nation as heading into a “soft landing” rather than a full-blown recession.
There does appear, however, to be a distinction between those catering to lower-income buyers and high-net-worth (HNW) individuals. Some mass-market jewelers are reporting the pinch.
Signet Jewelers, owner of retail chains Zales and Kay Jewelers, told investors in June that it would close as many as 150 stores and cut its forecasts for sales and profit for the remainder of the fiscal year (ending Feb. 3, 2024). The company attributed the slowdown to fewer wedding engagements as a result of COVID-19, coupled with consumers’ concerns about the direction of the economy and rising prices.
Meanwhile, the Luxury Institute—which tracks spending of HNW individuals (wealth of $1 million to $5 million) and ultra-high-net-worth (UHNW) individuals (wealth of $30 million or more)—predicted sales of fine jewelry and watches will rise by the high single digits this year.
Anecdotally, fine jewelry retailers who spoke to JCK in the wake of the JCK Las Vegas show in June say they have been gearing up for a slowdown, but so far it hasn’t come.
Schneider says Twist offers a range of jewelry price points and acknowledges that jewels in the higher brackets ($10,000 and above) are selling better than those at lower price points. The average sale remains around the $5,000 mark. As a result, Schneider is placing solid buys for the holiday season, despite the rising cost of materials.
Chrysa Cohen, owner of Continental Jewelers in Wilmington, Del., echoes Schneider’s optimism.
Diversification has been key to Continental’s business strategy, she adds. The store features a little bit of everything, from engagement rings and wedding bands to pre-owned jewelry and colored gemstones. It also sells both natural and lab-grown diamonds.
Other jewelers who promote natural diamonds say business is healthy because natural stones hold their value.
Gemstone Jewelers Inc. in Derby, Kan., primarily sells natural diamonds, and business has been “fantastic,” according to owner Patti Schrag.
Schrag’s customers are gravitating toward simple engagement ring styles such as solitaires or stones accented with small diamonds on either side. Younger couples are shopping in the $4,500 range, while more mature customers can spend up to $10,000. As for fashion jewelry, sapphires are still popular, as are diamond studs; the preferred metal is a “rich, buttery” 18k yellow gold, she says.
