The coronavirus has bitten into the bottom lines of companies across the fashion industry but jewelry, consistent with past economic crises, is proving resilient.
Jewelry has been seen as an outlier in fashion since ancient times. It is a wearable store of wealth, its glitzy component materials maintaining intrinsic value — unlike apparel or other accessories that rely on mystique and novelty as a means to attract a certain price.
While the jewelry category has taken a hit during this period, the blow has not been as extreme compared with other accessories categories. This is consistent with jewelry’s performance in past economic crises like the 2008 recession, 9/11’s aftermath and the Second World War.
According to recent studies by The NPD Group, personal bags including handbags and luggage saw a year-over-year sales decrease of 46 percent in March and 60 percent in April. Footwear also saw a steep drop-off, of 56 percent in April and up to a 40 percent decline in March compared with the same period last year. Jewelry, however — according to a Mastercard SpendingPulse survey — saw a 35 percent falloff in March. Diamond jewelry fared better — with a 29 percent drop, according to an independent study by the De Beers Group.
What makes COVID-19 a different scenario is that, unlike in past eras of financial duress, most jewelers’ stores are closed and shoppers are unwilling to leave their homes. These circumstances have forced jewelry, a somewhat conservative industry, to rapidly adapt and take on increased digital measures to remain engaged with clients.
Some Millennial-friendly jewelers that were already entrenched in e-commerce and social media report flat or increased sales, having seen a rush of business from shoppers looking to mark canceled occasions, like weddings or graduations, with a meaningful purchase. Others that have relied on wholesale are fast-tracking plans to launch e-commerce or grow their digital engagement strategies.
Here, WWD talks with jewelers about how they are weathering the crisis, their plans for the future and learning to sell five-, six- and seven-figure items remotely.
Greg Kwiat, owner Kwiat Diamonds and chief executive officer, Fred Leighton
This is an incredibly stressful but incredibly interesting time. It’s been very challenging, sales are down and we are facing the challenges you would all expect. I get asked a lot, “How is business?” My answer is generally always the same: “I am selling jewelry in the midst of a global pandemic.”
That said, I do believe our clients are appreciative of things. There is something about these moments of crisis that make you appreciate the blessings in life and milestone celebrations. I do believe customers are still in the mode of gift giving. We had a reasonably successful Mother’s Day and have continued to see engagement rings being purchased. I would say the jewelry business is certainly taking a hit right now, but there is a present and a future for this business.
Whether we like it or not, we are being forced to consider strategic approaches to business, our presence online and our communication with customers. We are forced to think how to operate in a world where face-to-face is hard or impossible. When forced to think about things, you are forced to get creative. We have done things over the last 10 weeks that have really advanced our initiatives online.
Some salespeople go into the store to make a selection to show to our clients. We have people doing Zoom calls from the store and in some cases have allowed people to take things home so they can have an appointment from home, if it’s not a daytime appointment. We have done some home visits and brought things over to show clients –—it’s all about our customers’ level of comfort. That’s where everyone will have to be flexible. People are going to be slow to be comfortable with things we took for granted two months ago.
We are readying our stores to receive visitors again, and they are thankfully smaller salons and boutiques — environments that are not high-traffic and allow us to be flexible to meet with customers in a safe and controlled environment.
I think that one of the reactions that people will have will be fewer, better things so I think perhaps focusing on things that are more meaningful. That bodes well for us selling things at a higher price point that are of a more classic, timeless nature. We are more long-term, value-oriented.
Carrie Imberman, Kentshire copresident
Jewelry is portable, it’s so easy to move from place to place. People tend to think of it as an investment. It’s part of a much bigger mind-set — since the dawn of time people have fetishized metal and jewelry, it’s always been sentimental and symbolic at its heart.
Mother’s Day didn’t go away because of COVID-19. We have built-in clients that have mothers that need to be celebrated or who want to mark weddings that have been postponed.
We are not trying to bulk up our inventory right now but I am still buying, because I can’t miss certain opportunities. I have some clients now who are still buying. Gold is at an all-time high and so is the colored stone market, so we aren’t reducing prices. That said, people are consistently buying in the lower price point categories, so we are making an effort to showcase those items.
We are still making toothsome sales, but it’s not like it was because Bergdorf Goodman is at the heart of our business. People don’t want to look ostentatious [now] but their financial reality is different than mine or the average person — those clients are still acquiring. I never thought the Internet would be a real platform for us, I couldn’t imagine just adding something to cart — it didn’t seem special. Our web site has given us some really surprising sales out of nowhere.
We had a really hard year last year with Barneys liquidating — it was really challenging for my business and I would never wish that on anyone. It taught me a lot about dealing with business in a crisis. It helped me prepare for this moment, which is a way bigger impact on our business.
This time has made me dig deep and think about my core values. My number-one concern was to keep my entire staff employed, so no salary reductions were the most important thing to me.
Social media is a really interesting tool because no one needs jewelry right now. I realized that and decided to just post things that make me happy. I never have time to be in direct contact with clients online that I don’t know. I’ve had the ability to reach out to people I didn’t know to ask questions or have them respond to different things. I built a new clientele in a way, new relationships online. It’s not my forte but our web site is doing very well.
I was thinking about my whole tone. Who needs jewelry? So it’s about — if you do, we are here to service you. For clients, it means supporting a small business, so our sales have been strong. But again — who knows what will happen tomorrow? I am being very conservative with spending.
This is far from over want and I want to err on the side of caution. I think people are a little stir crazy at home and aren’t feeling the financial ramifications yet.
If I were in Barneys, Neiman’s and Saks it would be a different, scary place for me. I remember in the last recession, instead of buying frivolously like five pairs of earrings it was more, “I’m going to think about it and buy one special piece that’s memorable and important.”
Kendall Reed, vice president, head of fine jewels, global head of online jewels, Sotheby’s
Traditionally we would think clients would need to try on jewelry in order to buy it, but we have found that with our online auctions that is not the case. Our clients trust our expertise and photography and cataloging and that helps them feel comfortable to buy jewelry sight unseen.
We are working remotely to come up with interesting ways to help clients — sending videos, adding pictures, having FaceTime appointments with clients. We are innovating quickly and our clients are responding to that in a way we are frankly surprised by.
I think our last day [in the office] was March 16 or 17 and we had an online sale planned already to close March 25. At the beginning of our time at home we had no idea how clients would react, it’s something we had planned for the year earlier to hold this auction. We were pleasantly surprised to know that over 90 percent of lots sold and made well in excess of the low estimate.
Looking at that sale we thought, “OK, clients are comfortable in this space.” We’ve had online auctions since 2016, it’s not a new platform for us. On the strength of that auction we decided to have another fine jewelry sale online in April since it seems like people are more willing to look outside the box.
We decided to do something really exciting, to sell one single lot — a Cartier “Tutti Frutti” bracelet. The client spent $1.34 million online — we have seen clients bid at high levels in a live auction by bidding online, but this is the first time something ever sold in an online-only format where a [jewelry] piece achieved over $1 million. Today we are focusing mostly on branded jewelry and important colored stones and diamonds.
Ruediger Albers, U.S. president, Wempe
Our two stores in New York and all our stores in Europe — a total of 34 Wempe stores — went dark from one day to the next. That was something we never experienced before. This was really unprecedented in every way, particularly because no one really knows how long this will take.
I remember after the crash of 2008 when Lehman Brothers fell, we decided to open seven days a week, when before we had not. We were able to re-cooperate. This was a total shutdown in the U.S., where we do not have an online operation, so therefore we ceased to generate sales as of March 17.
We have been trying to figure out how to connect with customers, so we have “Wednesday with Wempe” on Instagram Live where I interview leaders in the watch world, ceo’s of well-known companies for informal talks that give people a little insight behind-the-scenes. We got a lot of positive feedback on that, since it gave people a little diversion during these times.
My sales team reached out to customers to get in touch with them and that was very good to show them that we care and not just when we want their money, but in a general and honest way.
Now we are gearing up towards the new normal, we literally just received Plexiglass partitions that will be keeping customers safe as well as salespeople. We will have two teams in our set-up so they can alternate. This way we can make sure if one team has a member showing symptoms, we can exchange the team to minimize the risk of being infected.
We have quite a few customers that have been in contact with us and are very eager to get their watch fixed. They would love to treat themselves — quite a few people saved a lot of money, since they were not able to go to restaurants or travel, so I think there is some pent-up demand.
We will be missing foreign tourists. At Wempe, our focus over the last few years has been on our New York market, so our tourists — especially Asian tourists — have played a lesser role than they did five years ago, so that is actually a blessing in disguise.
We have kept a focus on a very attractive window space, which stretches half a block down Fifth Avenue. We take great care in showcasing merchandise and people have been pressing their nose against the window and falling in love with something there. It will be window shopping like in the old days — you can call and we will bring it out to the curb.
Jesse Lazowski, creative director, Marlo Laz
I’m definitely not opening [my store] until September. People are leaving the city and our online sales have been amazing. It’s not hurting us not to have the store open, also it’s not the experience I want — our store is teeny, so how are you supposed to socially distance or put a necklace on someone without getting near them?
It’s interesting, we are seeing a lot of new customers buy into our entry point at one to two thousand dollars. With clothes right now, you don’t want to buy something that is so trendy since you aren’t going anywhere. Jewelry is everlasting and that is what people are putting value into now. People want the real thing, real precious metals and gemstones — it’s not about quantity, it’s about quality.
This [crisis] has fallen during Mother’s Day and during graduation. Even though life stopped in many ways, other parts have continued to go on. During Mother’s Day, that week right before was insane, I don’t think I slept for five days.
I spoke to many husbands who were even more appreciative this year being home and seeing the stuff their wives do for their family and kids. They were so thankful for everything their wives or moms were doing and that had a huge impact on Mother’s Day sales, too.
François Delage, chief executive officer, De Beers Jewellers
Obviously this is really a crisis that is impacting everyone on a personal and professional level and you have a lot to do at the same time to make sure you take care of clients and staff.
This confinement brings out a form of humanity and I have been really surprised by the ability technology has given us to provide intimacy to clients at scale.
When China started to reopen was the time when we closed our Western stores. We have been looking for ways to operate in a different manner and how to engage clients in a way that is more relevant or meaningful and not intrusive. We have now reopened all our stores in Greater China and it’s doing really well. Our China business is now showing growth versus this same time last year, both in units and value.
We have seen a huge surge in online business. By coincidence, we launched our new web site at the end of April and we have seen a much higher engagement and conversion. We had always planned this launch — the timing was coincidental. It offers everything from entry price point to $250,000. It’s very focused on client services and our digital business is now more than triple compared to what it used to be.
I think jewelry is about marking special moments and COVID-19 has postponed the decision of purchase but does not change it. People are still wanting to get married and are thirsty to continue to live in some way and acknowledge that moment in their life. Clients are reassessing purchases and what they will do, but I think jewelry and diamond jewelry in general are an ennui to those considerations.
Jean Prounis, founder, Prounis
We were working in the city until March 14, and since then I have been able to continue payroll because of our success in sales. I would definitely accredit that to our bridal clientele. With so many weddings and celebrations canceled this year, couples wanted to continue with a devotional piece of jewelry. I have a client that still made rings for a virtual ceremony.
I think jewelry can provide sentiment more than any other wedding object. You are not necessarily wearing your original dress or going to fittings, but the ring continues to fit and fits in with the current climate, so as a purchase right now it is continuing.
We are a growing company, when we look at our merchandise numbers they doubled the first two weeks in March compared to last year. It was a little scary but it picked up after people had time to think about what they were looking forward to or what was holding them captive.
The other thing that has been very popular is birthday gifts. Usually we are really self-purchase-oriented but what I have seen lately are more birthday gifts and graduation gifts.
In these times I think we search for items we can embed meaning in, which can surpass this time. We want to continue to think of these moments in a positive light and I think that is what’s so profound about fine jewelry — yes, it maintains value, but it can also grow in meaning and sentiment.
This period of lockdown is definitely a journey, it has its own narrative. At each stage we never stopped thinking about what we can do to engage and compel our clients without feeling like we are doing a hard sell. That is not the way forward in these times. It’s about providing something maybe people didn’t know about your brand or providing an opportunity.
I’ve started to see from doing virtual press releases to launches of a product that we were going to do in-person that there is a way to be making sales and that people have been really responsive. That’s something that’s come out of this, that we would want to continue to do in some way. It’s better than what we did.
I could spend my life going to stores doing personal appearances, and you start to feel like that has had its day. I am assuming that designers have had to dig in and find something they wouldn’t have had to do otherwise and a lot of it is connecting with clients.
I suppose it’s easier if someone is already aware of you or had an experience with you. People are in tune with the process of buying online and getting it delivered. Generally I would say things fall a little lower than where we might be as a brand; $1,500 to $5,000 seems like the price point people don’t have a problem with online in fine jewelry.
It’s kind of easy to say you are going to get people back to basics with engagement or wedding rings and I’m sure there will be an element of that, but there is also something deeply personal about fine jewelry.
People’s connectedness to things is partly why I think jewelry is quite resilient. People feel connected to jewelry, maybe more than an old pair of jeans.
Charles Stanley, U.S. president, Forevermark
We see several reasons to be optimistic. During historic economic events going back to the Thirties, though diamond sales did fall they not only recovered quickly but they returned to levels before recessions. In 2008, I think sales rebounded at least within a 12- to 18-month period.
This crisis is different, it’s not solely economically driven, there is the health aspect of it which has a lot to say about how consumers will reengage this time around. We certainly believe that as people reemerge from lockdown, they will seek to mark things that are important to them. Diamonds will play an important part in that ritual and early indications from China are absolutely proving that the category has held up well. Within bridal we have seen an increase in average price points paid for bridal jewelry in China [since reopening].
Even if you look at what happened during actual lockdown in jewelry sales, we saw overall jewelry sales down 35 percent in March, according to a Mastercard SpendingPulse survey. Our corresponding data for diamond jewelry sales shows they are down only about 27 percent, according to our own proprietary analysis of partner sales data retail in the U.S. But bridal sales are only down 19 percent, so I think this all connects back to the idea that bridal jewelry will be more resilient. People haven’t stopped getting engaged over this period, but they may not have had a chance to buy diamonds during lockdown so we can expect a certain level of pent-up demand.
James Weiss, adviser, David Webb
We are absolutely still making sales, our focus is keeping our customer relationships healthy and active. At at our price point there are extremely long sales, relationships span years and sometimes decades — so it’s really about figuring out what’s the right conversation about our brand with customers at any point in time.
Jewelry is an emotional purchase and we think David Webb represents joy. For some customers, this is not the time for that conversation. For us, it’s quite bespoke and quite individual.
We are continuing on digital platforms in general and have taken time to create and curate a Pinterest account and a YouTube channel. We have done a lot of work on the David Webb site to the extent that people who can’t go into the shop can browse.
Everything is cyclical in our business, we have been through these crises before. We don’t believe that when you sell art that you slash prices. We are not selling $500 necklaces and don’t see spikes in volume one way or another. I hope going forward jewelry continues to be part of occasions as it has always been.
It’s a very new situation — we just moved our office, it was a very busy time for us and now we have a lot of time to think about next steps.
At the beginning I thought it was a shock to be locked down and that we were not going to survive in this new situation. With time, I noticed our main way to talk to clients was Instagram and had a lot of exchanges with clients here in Brazil, the U.S. and Europe. Little by little we have been making a platform online because we didn’t sell online before, so we are thinking of how to do that. I think Instagram is the best store to talk with clients.
We are making new products, we plan to launch a home collection to sell online marquetry products — it’s a new thing to happen besides the jewelry. Before I was always traveling to make shops with our partners. I was personally traveling to show the collection but now it’s a new situation and we have to learn a new way of living. I think it will take longer than we think.
We now have an e-commerce site launching in 40 days. We are making a special collection for e-commerce. I tried to make it at a reasonable price — people are not going to invest in very expensive things now.