Bridal Saves the Day

RAPAPORT…

Although this lingering recession has kept many storeowners biting their nails, hoping that another downturn isn’t on the horizon, at least one bright spot continues to glitter in the independent jewelry retail world. Bridal is still strong and, by some accounts, stronger than ever. In fact, for many small business owners, healthy bridal sales have been the lifeline that’s kept their operations afloat during these tough times.

Bright Spot

“What saved us in the downturn economy is the bridal business,” said Mike Lordo, president of Lordo’s Diamonds in Ladue, Missouri, a suburb of St. Louis. “People still want to get married. Our percentage in bridal hasn’t necessarily gone up, but it’s kept us above water. And it’s traditional. A girl, she’s been dreaming about a diamond ring all her life. Thank God for that.”

For some stores, bridal was not just a lifeline but also a growth area. “Our 2009 bridal business increased over 2008,” said Tonia Leitzel Ulsh, chief operating officer (COO) of Mountz Jewelers in Camp Hill, Pennsylvania. “We changed our marketing and advertising to appeal more to the young, first-time-engaged couples. However, our average engagement ring price has decreased. This is not necessarily because of the recession, but because we stocked lower-priced rings, as well as marketed toward a younger customer.”

In other impact from the recession, some retailers picked up business — and market share — from other retailers who were forced to close their doors. “The recession has affected the bridal business, but our bridal business is up because we have gained market share,” said Kathy Corey, vice president of merchandising at Day’s Jewelers, with five stores in Maine and one in New Hampshire. “We see great opportunity for accelerated growth in the next two years.”

Veiled Threats?

Despite the good news, there are definite challenges in today’s market. One of them is budgetary. “The economic recession for the past two years has caused couples to postpone the engagement event because of employment uncertainty,” said Corey. “Many young men are putting off the purchase of a diamond engagement ring, creating a short-term shrink in the number of diamond engagement rings purchased.”

In addition, some couples are simply spending less. “We’re carrying a wider variety of diamonds in various price points that vary in size, clarity and color to accommodate the younger client,” said Lula Halfacre, chief executive officer (CEO) and chief financial officer (CFO) of Traditional Jewelers, with two stores in Southern California. “Moving forward, I see more price consciousness, with value as a major consideration.”

Naturally, the internet is still seen as one of the largest enemies of the independents. “The internet has increased competition for local jewelers on a worldwide basis,” said Halfacre, referring to the fact that jewelers must now compete on a global scale for business and not just with the retailer down the street. “Customers are checking for diamonds on the internet and then coming into their local jeweler to match prices. This is challenging, and local jewelers must work closely with clients to develop the relationships and work on selling diamonds and settings that she loves.”

Brant Kane, diamond buyer at E.E. Robbins, with three stores in Washington State, agrees. “The biggest challenge to bridal today is global competition from the internet,” he said. “We’ve chosen to dabble in the internet, but we want to be a land-based operation so we can say, ‘You’re going to get better service if you come in and see me.’ If we try to battle on price alone, we’re going to lose. If you don’t give them more service and better value, they’re going to go online.”

Personal Approach is Best

The ability to provide an intimate point-of-sale experience is what bridal retailers expect will ultimately level the online playing field as the economy evens out. “Consumers are much more educated today,” said Lordo. “We had some fear over the past five years about the internet, but I think people like to touch and feel, and I think you might see the internet not doing so well moving forward, and you might see a rise in brick-and-mortar sales. A lot of people want to go to an independent store and sit down and talk to someone and know that you’ve been around for a long time.”

Ulsh agrees. “I believe that bridal sales will come back to brick-and-mortar operations because the recession has brought back the community feelings,” she said. “People have learned to appreciate family and home and this also will build the need for a connection at the time of buying bridal.”

The Marketplace

• Round is the top-selling shape, though princess cuts come in a close second.
• 1 carat and 1.5 carats are the favorite weights.
• SI1 is the most purchased clarity, and I1 is the biggest growth area.
• G-H is the most popular color range.
• In settings, 14- and 18-karat white gold beat platinum, but only by a little.
• The average price for an engagement ring, including stone and setting, is $4,500, though in extremely affluent areas, the average is still in the $25,000 range.