Recession and Designer Diamond Jewelry, May 2009

Diamond is considered as a women's best friend. But recession bought in the phrase "So much for diamonds as a best friend". For jewelers, and store owners the gem have lost some of their BFF status to the economic downturn.

Only 25 percent of those participating in National Jeweler's Product Panel reported that non-bridal diamond jewelry comprises 40 percent or more of their overall sales compared with 36 percent who make that same claim for bridal, yet earrings, bracelets and diamond necklaces do remain a staple for many retailers.

Over the past 3 years, non-bridal diamond jewelry sales remained level for 48 percent of the retailers on the product panel. Sales decreased for 28 percent and increased for only 24 percent of panelists.

Inventory volume of non-bridal diamond jewelry is also holding steady, with 75 percent of panelists reporting their stock is about the same or increasing.

Markdown madness

With the recession feeling, reducing the price on non-bridal diamond jewelry, thereby taking lower margins, is one way retail panelists say they are coping with the economic downturn and the luxury designers have also changed their attention to affordable and medium range luxury diamond based jewelry.

One panelist wrote."We continue to sell value and quality jewelry but may reduce margins to close a sale,"

And an another stated, "We are faced with every jeweler doing whatever it takes to make the sale, and yes, that means lower margins."

However, one panelist refused to play the markdown game.

"We have not resorted to deep discounting," the panelist wrote. "That will not increase sales...The sky-is-falling mentality really get you anywhere."

Quality check

When asked to note the ups and the downs in the non-bridal diamond jewelry market over the past 5to 10 years, one theme that came up repeatedly among respondents was poor quality, especially in pieces that include pave and micro pave diamonds.

"Jewelry with the little diamonds has to be repaired more often," one panelist stated.

Another noted that the rise in popularity of micro pave styles might be good for the consumer, who gets a bigger look for less, but not so good for the retailer, who ends up doing repair work on these pieces.

"Pros for the customer--more bang for the buck," the panelist wrote. "Cons for the jeweler--more replacement work."

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