According to a Jewelry Consumer Opinion Council (JCOC) study conducted among consumers at the end of March, the average American does not intend to splurge on fine jewelry any time soon, as israelidiamond.co.il reports.
To the question as to when they expect to start purchasing non-essential products and services again, the sobering responses were as follows: 55% - no idea; 16% - more than one year; 10% - within 6 months; 9% - within 12 months.
Discouraging responses for fine jewelry retailers came to the question, “When you begin purchasing non essential products and services again what is the first product or service you will buy?” 19% said they would first spend their hard-earned cash on vacation and travel; 13% stated they would go initially for home furnishings; 13% settled for going out to dinner; 9% claimed they would buy a new computer; 8% intend to buy a new car and another 8% will settle for a used car, while at the tail end only 5% insisted they would splurge on fine jewelry.
Under recession, the idea to introduce additional taxes on luxury is finding more and more followers. For instance, in Russia it is supported by Sergey Mironov, Speaker of the Federation Council. As for the United States, an additional 5-percent tax on watches and jewelry worth over $20,000 was discussed early this year in two states, New York and Illinois. However, jewelry and watch industry organizations, which appeared to be potent lobbyists, managed to cancel these bills.
The “kitchen” of this process was disclosed by Jewelers of America (JA), the national trade association for businesses serving the fine jewelry retail marketplace, in its special press-release on the results of Illinois campaign.
As is reported, JA targeted both members and nonmembers in an aggressive anti-luxury-tax letter and fundraising campaign, reaching out to its state affiliate, the Illinois Jewelers Association, and the nonaffiliated Chicago Jewelers Association. The association provided jewelry businesses with sample letter/petitions and the addresses of Illinois state legislators, including the bill’s sponsor, members of the committees considering the proposal and the state’s legislative leaders. Jewelers were urged to collect signatures from all of their employees to add to the letter/petitions, to underline the effect that a luxury tax could have on workers in the jewelry and watch industries.
In New York, according to JA, it was joined in its efforts by the American Watch Association. The associations hired a lobbyist in the state capital of Albany to advocate on the industry’s behalf, and they continue to press legislators and governor David Paterson to drop the proposal from the final version of the budget.
Due to the recession the number of international jewelry shows is being decreased, while those going on are given ambiguous assessments on the part of exponents and visitors.
Thus, israelidiamond.co.il with reference to AFNS reported that jewelry exhibitions were cancelled in India and Dubai.
The JCK India show, scheduled to open on June 27 in New Delhi, was cancelled by its organizers Reed Exhibitions, who cited the downturn in India’s domestic jewelry market as the reason for the cancellation.
The seventh annual Dubai City of Gold Conference, which was to have begun on April 25, was called off because of the sluggish state of the jewelry markets.
According to reports, many veteran exhibitors and sponsors pulled out of the event due to the financial meltdown and the organizers were unable to find enough sponsors for the jewelry trade show.
Dealers are giving mixed reports about the BaselWorld 2009 watch and jewelry show the diamonds.net portal says. “For those who went with low expectations, the show was okay; for others it was disappointing,” explained one industry insider at the event.
Exhibitors noted an absence of buyers from the U.S., as well as a decline in traffic from India and Asia. European and Middle Eastern buyers were more visible.
Exhibitors expressed concern that the show was too long and too expensive, noting that they felt compelled to attend because they had paid half their fees before the economic crisis hit last year. Still, many companies cut their spending budgets and activities at the show.
According to the organizers of the Basel Show, in 2009 the number of its attendees fell 13% down to 93,000. Foreign buyers accounted for 68.1% of all visitors compared with 63.6% in 2008. The organizers say that 71% of the polled respondents said they were going to come back to the show in 2010. The organizers have scheduled the 2010 show for March 18 to 25.
As millions of Americans struggle to pay their monthly bills, the word on Main Street is that this is no time for the affluent to be showing off with flashy cars and lavish jewels, National Jeweler says. But over in Hollywood, the show does goes on, with the biggest stars of movie and TV dressing up in diamonds and gemstones for the winter awards season, thus providing that window into the glamorous life the public so craves.
Fears that the economy might inspire drab attire and pared-down accouterments at shows such as the 81st Annual Academy Awards, 66th Annual Golden Globes and the 15th Annual Screen Actors Guild (SAG) Awards proved to be unfounded, with color and flash out in full force.
Michael O'Connor, a style expert and consultant for Platinum Guild International USA, says the stars excelled in playing the roles that they know best: being celebrities.
"A lot of people asked [prior to the shows] if the mood was going to be more somber, and my thought on that is that people don't go to the movies to live in their own reality, and they don't watch any awards shows to be in their own reality," he says. "I believe that if Hollywood did not dress up and really look glam, they were not doing their job, which is helping to alleviate people's reality and the stress of everyday life."
Andrea Hansen, international communications director for Brazilian jeweler H. Stern, had similar thoughts.
"At the end of the day, do we appreciate [celebrities] for the entertainment they bring or do we want them to emulate us?" she asks. "They have to make good movies; that's what they are paid for. They are not paid to fix the economy."
Hansen says that while a few socially and politically minded celebrities laid low amid the economic downturn (Angelica Huston, for example, skipped the September Emmy Awards, which took place the week Lehman Brothers closed), Hollywood remains relatively insulated, and box-office revenues remain strong, paving the way for business as usual.
Michael Coan, the chair of the jewelry design department at New York's Fashion Institute of Technology, says Hollywood has not, historically, dialed down the glamour in tough economic times.
"If you look at the 1930s, [the times] couldn't be more depressing than they are now," he says, noting that the era was a heyday for Hollywood glamour. "I think the ostentation is going down, but the elegance is in. Overall, they're going classic, as people do in times of trouble."
