Mid-January generated first reports on Christmas and New Year sales in different parts of the global jewelry market. In the West and Japan, sales figures stayed within an abatement corridor ranging from several to thirty percent; the worst results are displayed by high-end segments, while the mass market of inexpensive jewelry was not much lower than one year ago. In the Middle East and South East Asia jewelry sales fluctuate along the line of last year results.
United States
Mass consumption jewelry networks have not suffered greatly. Thus, discounters Wal-Mart Stores, BJ's Wholesale Club, and J.C. Penney reported successful or soft sales, but gave no figures. Retail sales in brand boutiques during the two months before the New Year dropped down by about one fourth. For instance, jewelry sales at Birks & Mayors decreased 31 percent, at Signet Jewelers 16.4 percent, at Zale Corporation 20 percent, at Finlay Enterprises 24 percent and at Tiffany & Co. 30 percent. Richemont of Switzerland, a large-scale jewelry manufacturer (owning Cartier, Van Cleef & Arpels and some other blue ribbon watch and accessories makers) reported lower sales in the United States in the third quarter by 24 percent in euros. Last December online sales were down 24 percent. It is noteworthy that the U.S. consumer price index for jewelry, despite stable gold prices and a downward trend in prices for diamonds and other gems, went up seven percent last autumn. Assuming the mass consumption segment accounts for 70 percent of the U.S. market we can assess the total fall in the U.S. New-Year-retail sales as 15 percent. Buying raw materials for jewelry is the only thing which appears dramatic reflecting plans for the first quarter 2009. The trend to substantially curtail purchases and industrial orders made itself evident in September-November 2008. For example, during those three months Lazare Kaplan International posted a drop in rough diamond sales by 56 percent and in polished diamonds by 53 percent explaining it was due to a “significant impact of global economic conditions on sales and customers’ reluctance to purchase inventory in response to liquidity concerns”. According to U.S. statistics, diamond import in November 2008 was down 37 percent compared with 2007. The landslide in purchasing jewelry inventory is indicative of pessimistic attitude among retail jewelers towards the first six months of 2009.
European Union
There are only odd figures related to this area. For instance, Tiffany & Co. reported a four-percent drop in sales across the area. Signet Jewelers posted slumped sales in the United Kingdom by 11 percent. Richemont sales (including Cartier and Van Cleef & Arpels) in Europe decreased 8 percent in the third quarter. The total sales decline may be estimated as 5-10 percent. Christmas sales in the British stores of Theo Fennell fell 21 percent. The median sales drop in the European Union may be assessed as 10 percent.
Japan
Last November, in the run-up to the pre-New-Year sales, Japan’s import of jewelry made in gold decreased 13 percent, in platinum 33 percent and in silver 26 percent. Its import of gems was similarly down 21 percent, colored stones 35 percent and pearls 12 percent. Last November Japan’s diamond import fell 26 percent. In general, the downward trend in retail jewelry sales in Japan was registered about one year ago; however, last spring experts expected a 20-percent drop, last summer a 30-percent drop and last December as great as a 40-percent drop in sales.
South-East Asia
This area displayed alternately directed tendencies. China has not registered any drop in sales. On the contrary, branded jewelry even went up. For example, Richemont sales (including Cartier and Van Cleef & Arpels) in the third quarter grew 24 percent. In Hong Kong, the September-November sales of jewelry, watches and other luxury items were down 3.7 percent. In Singapore, the October-November sales index dropped 3.4 percent, including jewelry. In Vietnam, demand for jewelry with such gems as diamonds, rubies, and sapphires decreased in the 2008 Christmas season compared with the same period of the previous year. The Phu Nhuan Jewellery (PNJ) Company said its luxury and gem jewelry during the Christmas season went down 30 percent. In South Korea, taking into account the overall situation retail merchants selling New Year gifts (as for instance at the Shinsegae Department Store Network) slashed their medium assortment price two times well before the season and as a result did not fix any substantial sales decrease, but even expect a 10-percent increase. However, New Year sales in South East Asia are not yet finished. The Lunar New Year is on its way coming on January 26. Undoubtedly, the “twofold” consumer boom is whipping up sales.
Arab countries
According to piecemeal data, sales in this area did not suffer any falls and in some segments even went up, as for instance was the case with Cartier and Van Cleef & Arpels. However, statistics here is a subtle thing. As a first approximation it may be assumed a + 0 percent growth compared with 2007.
Conclusion
On the background of stock indices across the world’s trading floors falling 60-90 percent, jewelry sales going down in different segments 15-30 percent do not appear as something dramatic. Quite the reverse, one should marvel at the “consumer optimism” of public at large belonging to different races, religions and world views. If we try to colligate the world data taking into consideration the capacity of regional retail markets (for instance, the U.S. market accounts for 50 percent of jewelry purchases), then the mean sales-decrease figure will be close to 10 percent. The previous economic crises prove that the diamond segment of jewelry is usually hit hardest, which may be estimated at a 20-percent drop. On the contrary, spurred by the substitution effect, people increase their purchases of bijouterie made of silver, plastic and non-ferrous metals, which in most countries is not rated as jewelry. “Diamonds are not the recessionista’s best friends” is a popular joke on the world’s jewelry markets. If there are jokes, it means the diamond apocalypse is still far away (if ever possible in the foreseeable future).
Vladimir Teslenko
