By Cotten Timberlake
December 13, 2010
Justin Rosenblatt plans to fork over $2,000 this month for a Roberto Coin stackable ring, Sonya Renee monogram necklaces and Wendy Mink hoop earrings for his wife and friends. That’s twice what he spent on sparkle last year.
“It’s a more extravagant and personal gift,” said 37- year-old Rosenblatt, the Los Angeles-based vice president of the CW Network, which airs “Gossip Girl.” “I am still cognizant of my budget, but feel there is a bit of reprieve in the economy.”
Rosenblatt is one of the shoppers driving this holiday season’s jewelry sales, which may rise 6 percent to $4.39 billion, according to Los Angeles-based market researcher IBISWorld Inc. Last year they sank by one-tenth. Tiffany & Co. expects sales to rise 10 percent in 2010; Blue Nile Inc. as much as 12 percent this quarter.
Such discretionary purchases show consumers have gained strength and presage a broader recovery, said Milton Pedraza, chief executive officer of the New York-based Luxury Institute.
“Jewelry is often the last category to turn upward,” Pedraza said. “It is probably the most discretionary of all the categories purchased in a store. This tells me that the economic cycle overall has turned.”
U.S. consumer confidence reached a six-month high, an economic report showed last week. Consumer spending may rise an average 2.6 percent in 2011, compared with a 1.7 percent increase this year, according to the median estimate of 56 economists in the latest Bloomberg monthly survey.
A rising stock market also has left some Americans primed to spend more this holiday season. Jewelers depend on the year- end period for annual sales more than any other type of retailer, according to the National Retail Federation, a Washington-based trade group.
A third of jewelers’ fourth-quarter sales take place in the 10 days before Christmas, said Michael McNamara, a vice president at MasterCard Advisors’ SpendingPulse, a Purchase, New York-based research firm.
New York-based Tiffany was “delighted” with the initial customer response to its new collection of exclusive yellow diamonds, Mark Aaron, a spokesman, said Nov. 24. The company’s popular keys — which come in a variety of shapes and sizes in diamonds, platinum and gold — were performing well, he said.
Last year the world’s second-largest purveyor of luxury jewelry saw sales fall 11 percent in the Americas. The sales rebound has helped shares rise almost 50 percent in 2010 before today. They climbed 38 cents to $64.06 at 9:34 a.m. in New York Stock Exchange composite trading.
In addition to gifts, engagement jewelry sells well at this time, Diane Irvine, CEO of online jeweler Blue Nile, said in an interview. Blue Nile shares rose 34 cents to $57.27 at 9:35 a.m. in Nasdaq Stock Market trading.
Purchases at Tiny Jewel Box Inc., a family-owned jewelry store on Connecticut Avenue in Washington, accelerated so much last month that the shop ran out of items it expected to sell in December, said CEO Jim Rosenheim. The strongest demand came from the top tier of wealthy customers, he said.
“People are feeling more secure that they are not falling into the abyss,” Rosenheim said. “People are not going ‘Oh my God, I really have to do this.’ Attitudinally, they are doing it more open-hearted, with their wallets more open.”
That has more jewelers flaunting trinkets online, in windows and in advertisements. Seattle-based Blue Nile is displaying its largest number of styles after sales improved in October and November, ranging from a $40 silver infinity love knot pendant to diamond eternity necklaces for $50,000. One customer even bought a $250,000-plus diamond engagement ring via the Blue Nile iPhone app in November.
The company had 80,000 diamonds available for custom jewelry orders, up from 65,000 last year, said Irvine, 51. Blue Nile also introduced new pearl strand styles, including a $185 “tuxedo” strand of alternating white, black and gray pearls, as well as colored gemstones.
Signet Jewelers Ltd., the world’s largest jewelry retailer, is putting “additional juice” in fourth-quarter ads, CEO Terry Burman told analysts last month. The Bermuda-based company operates Kay and Jared stores.
Signet is better positioned than some of its rivals, which foundered during the 18-month recession that ended in June 2009 and was the worst since the Great Depression.
Almost 4,000 U.S. jewelry retailers and suppliers went out of business between the start of 2009 and the end of November, or more than 10 percent, according to the Jewelers Board of Trade in Warwick, Rhode Island.