INDEPENDENT RETAILER magazine is now the official news outlet for Wholesale Central visitors.
Each monthly issue is packed with new product ideas, supplier profiles, retailing news, and
business strategies to help you succeed.
See new articles daily online at IndependentRetailer.com.
Oct 1, 2010
by Kevin Zimmerman
Time may indeed heal all wounds, as the old saying goes, if the recent performance of the jewelry and watches segment of the economy is any indicator. Hit hard by the economic downturn, the segment now seems to be on the uprise, which according to most sellers, portends a good holiday 2010 shopping season. At press time, analysts were expecting strong second quarter results to be posted by jewelry bellwether, Tiffany & Company. Tiffany, which reported earnings per share (EPS) of $0.48 for the first quarter of this year, was predicted to meet or surpass an EPS mark of $0.52 for the second quarter, on sales of $692 million. Goldman Sachs stated in August that diamond prices were up 17 percent when compared with 2009.
On the timepiece side, Fossil Inc. reported second quarter net income of $54.5 million, or 80 cents a share, compared with net income of $16.6 million, or 25 cents a share a year ago. Revenue for the company, whose watches sell from about $7 to over $2,000, rose 31 percent to $412.6 million. And luxury products group, LVHM Moët Hennessey Louis Vuitton, posted overall revenue of ?9.1 billion ($11.8 billion) in the first half of the year, an increase of 16 percent. Its watches and jewelry division reported revenue growth of 28 percent to ?443 million ($575.9 million).
Also playing a part in both the jewelry and watches sector is gold, whose price has generally continued to gradually rise, in the face of the overall economic malaise. Over the past twenty years, the price of gold has risen steadily and has not been as adversely affected as other segments of the economy during slowdowns that occurred over that time period. The economy, of course, remains very much on the minds of those selling jewelry and watches. "We started at practically the same time as the market crash in 2007," says Kye Park, director of D&D Florida Import (www.ddflimport.com). "So for us, we've seen things going up over the past couple of years. I'm still investing, and our sales have maintained a steady pace."
Jewelry that features bright colors, often in pastels, is doing particularly well, and acrylics are currently popular, Park says. Colorful pearl tone stud earrings in bright reds, blues, and pinks, and multiple bead/earring sets featuring 15.5 inch necklaces and a pair of one inch earrings, each go for $7.50 per dozen. Bracelets featuring brightly colored pearls or stones are mostly priced in the $5 to $9 range. Orders under $100 are assessed with a $9 flat rate shipping charge, while those over $100 are assessed a regular shipping charge.
"Our target audience really runs the gamut," Park says. "We have something for everyone: Teens, tweens, people in their 20s to their 60s and beyond. Earrings and accessories are doing particularly well at the moment." As to the impending holiday season, he says, "We've just started looking at it, but we expect to be launching several new items and styles, including some Christmas related merchandise."
Though not quite as bullish as Park, Timothy Choi, general manager at La Fina Design, Inc. (www.wholesalecentral.com/lafinadesign), says business at his company, "Has been all right, not too bad. We are starting to see some slow progress." La Fina specializes in twisty necklaces, bracelets, and semi-precious gemstones, with the latter's popularity due to being attractively priced. "Anything with pearls, tiger-eyes, that kind of thing, is a good seller for us." He adds that necklaces outsell La Fina Design's other merchandise by three to one. The store requires a minimum order of 12 pieces.
Attending conventions and other trade shows is critical for his business, Choi adds. "That's where we really get a line on what's going to be popular for the next season, or even couple of seasons." Choi said he didn't yet have a clear picture of what the holiday season could mean for his business, but added that he was confident that it would be, "better than last year."
Also hesitant to try looking into a crystal ball is Danny Hughett, president and owner of Sun Trading ATL (www.suntradingatl.com), based in Georgia. "Our business has been down, pretty much like everyone else's," he says, "and with the flip-flops not only in the economy but also in fashion, it's difficult to say for sure where we're headed in the near term." Many of Sun Trading's items, from necklaces and bracelets to pins and earrings, are priced at $1 each, though there are some notable exceptions. Hairbands featuring peace signs made of rhinestones are available for $10 per dozen, as are a range of flower-shaped pins featuring colored rhinestones. Sun Trading requires a $50 minimum on all orders.
The company also offers a range of religious jewelry, often with crosses, but sometimes with striking Christian iconography, mostly for the same $1 per piece price, and a special, "Buy One, Get One Free," section. "We tend to overstock everything for the winter, just in case," Hughett says. "That way, we can react quickly to any need of our buyers."
The ten-year-old H&R Fashion Jewelry store in Los Angeles launched its website in June (www.hnrfashionjewelry.com), and so far has been a great success, according to website manager Noel Gonzalez. "We've been sending out a newsletter using Constant Contact and gaining visitors that way, and we've seen a steady increase in people signing up to join," he says. "As they gain more experience with the website, they are tending to purchase more."
H&R further helped push traffic by initially running a "10 Percent Off Your First Online Order" promotion, and occasionally offers other specials, such as taking $5 off on shipping charges. The store maintains a $100 order minimum policy, and ships within 24 hours of ordering. "Unlike other stores that have active websites as well, we always promote our latest arrivals on the site, not just stuff that hasn't been selling," Gonzalez notes. "As our in-store customers have gotten more used to that, they've become more willing to order or re-order online."
Bracelets and layering necklaces are among the store's biggest sellers at the moment, with charm bracelets especially popular. Themed charm bracelets with all elephants or purses, or a "good luck" style whose charms include a four-leaf clover, horseshoe, and wishbone, are doing particularly well. "Any novelties are really popular right now," Gonzalez says. Login is required to see prices.
H&R is, "Always looking for something that's a little different from what the other vendors in the market are selling," he says. "We try to offer stylish pieces that are still commercially priced. Anything that's trending in the magazines or on European websites is something we make sure we carry." The store plans to add special Halloween and Christmas themed jewelry, as those seasons grow nearer. "It's all part of our plan to let our customers see something new every day," Gonzalez says.
On the watches side of the equation, business overall has been a little slower to recuperate. "We are doing what I would call 'medium well' right now," says Sawani, president of Time & Watches Inc. (www.quemex.zoovy.com) in Miami. The company specializes in brand name watches by such manufacturers as Casio and Quemex. "In general, we find that brand names do better than off-brands," he says.
Analog Casio watches are priced between $6 and $24.50, with ana-digital timekeepers starting at $11 and topping out at $42.50 for a men's dress watch, whose features include a thermometer, alarm, stopwatch function, and programmable time zones for up to 50 cities. Watches in the Casio Databank line ($10.50 to $37.50) can include such features as a TV/cable box remote control, eight digit calculator, and auto-calendar. Quemex pocket watches, available in a variety of colors, are available at $3.25 each
Time & Watches also offers watch sets at $3.50 to $7.50; the "Army" set ($6) includes a camouflage designed analog watch, Velcro band with compass, key chain, pen, and binoculars, while the Mark Namer "Music of Summer" set ($4.75) includes a watch, sunglasses, and a radio. The company also does well with an array of table and wall clocks, Sawani says. Quemex table clocks, available in a number of shapes and colors, go for $2.75 to $5.25, while Quemex wall clocks are typically priced in the $20 to $25 range. Time & Watches charges a $10 handling fee for any order less than $200. Still, Sawani says, "Our watches definitely sell more than our clocks." Declining to speculate on how the holiday season might shape up for Time & Watches, he notes that the company is in the midst of updating its website, making it more user-friendly, and adds that it may consider further lowering prices.
Meanwhile, at Dunnellon, FL based Watch Closeouts (www.watchcloseouts.net), "We're running on or around our mid-2005 numbers," according to owner, Jeff Weller. "Business is still down from the heady markets of 2007 and '08." As its name implies, Watch Closeouts deals strictly with closeout merchandise, up to 90 percent off the original price. As a result, "Our more moderately priced merchandise tends to do better."
The company's stock is thus always changing, but merchandise by name brands like Timex, Bulova, Armiton, Pierre Cardin, Kenneth Cole, and Seiko is usually on hand. The store's site lists each piece's original suggested retail price. Site registration and login are required to view the discounted cost. Since Watch Closeouts requires minimum orders of ten items and $200 (excluding shipping), it also does a fair amount of business with repair tools (pliers, wrenches, etc.) and polish cloths. "A lot of our customers use those items to meet the minimum requirement, rather than have to add another watch," Weller remarks.
Watch Closeouts is in the process of launching another watch business early next year. Though Weller declines to go into specifics, he says the new venture will not be designed to compete with its existing website and retail customers. "We've thought long and hard about it, and that's just not the way for us to go," he says. "We think we've found a niche that is in no way competitive with them, in part because the merchandise won't be the same."
For more information:
Kye Park, director
D&D Florida Import
2703 NW 5th Ave.
Miami, FL 33127
Timothy Choi, general manager
La Fina Design, Inc.
303 5th Ave. Ste. 1408
New York, NY 10006
Danny Hughett, owner/president
Sun Trading ATL
3731 Northcrest Rd Suite #18
Doraville GA 30340
Noel Gonzalez, web manager
H&R Fashion Jewelry
210 E. Olympic Blvd #300 A
Los Angeles CA 90015
Hyder Sawani, president
Time & Watches Inc.
127 N.E. 1st Street
Miami, FL 33132
Toll Free: 800-228-1279
Jeff Weller, owner
Think7 Inc. / DBA Watch Closeouts
11150 N. Williams Street, #8
Dunnellon, FL 34432
Toll Free: 877-463-7888
Topic: Product Trends
Entire contents ©2020, Sumner Communications, Inc. (203) 748-2050. All rights reserved. No part of this service may be reproduced in any form without the express written permission of Sumner Communications, Inc. except that an individual may download and/or forward articles via e-mail to a reasonable number of recipients for personal, non-commercial purposes.