The growth of e-commerce, the loss of domestic manufacturing, and a devastating recession have significantly impacted the jewelry industry in the U.S. The issues facing the businesses on 47th Street grow more complex as the pace of change accelerates.
This month, DDN asked several leading professionals:
“I think the industry has changed more in the last few months, rather than the last few years. Firstly, there has been a gradual shift, over time, away from the traditional informality of transactions. Fewer handshakes, more paperwork. The larger bankruptcies in the industry have taught people legal lessons, which they fortunately did not need to know before. Now, filing UCC’s are more common, tighter controls on trade credit exist, and references are sometimes insufficient. The downturn in the economy is leading to a contraction in the industry, which is a good thing for its long-term viability. Fewer speculative purchases and a more focused approach is prevailing. On the retail side, the consumer’s perception has changed towards fine jewelry – as heavy discounting and clearances of stock from store closings have eroded the intrinsic value that precious metals and stones commanded in jewelry. Hopefully, as the market restructures itself, this will be somewhat reversed.” – Steven Silverstein, IDI, New York
“There has been a loss of cash flow because of the economic downfall, which has made consumers conservative in their spending. It’s not as easy to make sales the old-fashioned way. Most vendors with small capital and old ideas that used to work in small markets are gone. You will see more and more vacant spaces on the street, but I believe the street is changing for the better. Good and smart jewelers are surviving and the extras are leaving. — Mehdi Afshar, TechnaOro Inc.
“Consumers have never had it so good because the middle people have been cut out, and you’re working closer to the actual cost. The downside – a lot of jobs have been lost from this because manufacturing has gone overseas to keep costs down.” – Avery Weisz, Weisz Jewelry & Precious Stones
“More than ever, jewelry stores need to focus on what we do best –provide the best shopping experience possible, which includes everything from customer service, retail therapy, quality, price and value. With the reach and range of goods available online, the items can be commoditized, however, the jewelers’ knowledge and relationship can’t be commoditized.” – Mark Ehret, Jennifer Miller Jewelry Stores
“The jewelry industry has changed tremendously. We’ve seen the rise and fall of the chain and the breakup of the DeBeers cartel. All of these developments have benefited the jewelry consumer.” — Jeff Levin, Firenze Jewelers
“With the bad economy, business has obviously contracted. I’ve seen manufacturers move out of my building who either needed less space, cheaper space, or who simply moved out of New York.” – Keith Lipstein, ABS Partners
“The Internet has changed the way we do business. It has lowered our profit margins. I see many people buying online but not a lot of important pieces being bought. Some things have not changed. People still want to know the jeweler and the nuts and bolts of the company. When the customer is spending for more important pieces they want to know there is a human being to talk to, that if the ring breaks they can come back to you.” – Richard Winick, Manny Winick & Son Inc.
“The Internet as a place of commerce has transformed the jewelry business. Wise forward-thinking jewelers are investing in developing e-commerce websites to complement their physical retail locations.” — Michael Grumet, BID director
“The jewelry industry has been undergoing changes during the last five years along with every other industry. Information is readily available for research and products for purchase via the Internet than ever before. We believe, however, that business that once may have dwindled within the brick-and-mortar of our industry will see an increase as the economy improves and consumers start to spend.” – Ronnie VanderLinden, Diamex
“Buying habits have changed, with the consumer being more knowledgeable about what’s out there, sophisticated in taste, and making more intelligent buying decisions through the array of information available to educate them. For wholesalers, the use of catalogs has been substantially reduced, while communication through the Internet and jewelry trade shows has increased. Retail store activity is down and jewelry manufacturing in the U.S. is declining though some firms are doing well. The watch business has grown by leaps and bounds, while jewelry imports from India and China have skyrocketed at the expense of European suppliers.” – David Abraham, David Abraham & Co. Ltd.
“Labor expenses in the U.S. has caused much manufacturing now to be done overseas, where up to a few years back most product that we used here on the block was made right here. This is a big change on the manufacturing level, as far as retail sales are down because there is much less street traffic within a block that just does not have the attraction, or mystique that we used to have. The aggressiveness of many merchants frightens the high-end consumer away from 47th Street and many of the once renowned jewelers and retailers have fled to different locations. The bifurcation of the block caused by the Extell construction project has an impact on traffic as well.” – Harvey Nagin, Nagin Jewelry Co. Inc.
“The nature of the business has changed. Many people who were here, father to son, a lot of that is gone. The sons do not want to be jewelers, they want to be lawyers. There have been a lot of changes with manufacturing. You can’t compete with China and India.” – Ken Kahn, Kahn Realty