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US Market Treading Cautiously
While the gloom of 2008 and 2009 seems to have lifted a bit, economic indicators suggest that it will take a long time for the economy to shake off the effects of the recession. In these circumstances, caution is still the watchword for the jewellery industry in the USA. Arpit Kala reports.
By: Arpit Kala
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Aug 25 2010 1:44PM
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Reference: 5248  

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That 2010 has begun in a relatively positive note for a jewellery industry that had been badly battered by the financial crisis that began in late 2008 was amply clear in the mildly optimistic mood that prevailed during the JCK Vegas exhibition. After almost a year, retailers were placing orders, although in restricted quantities, and there was some movement in loose stones and jewellery.

However, caution is still the watchword, as the economy struggles to get back on its feet. Says Rayaz Takat of Takat Gems, “Though we are up as compared to last year, we are still at 50 per cent below the 2008 levels. We manufacture only after receiving orders, have stricter terms of payment for our older clients and deal with new customers only on a cash basis.”

Stephen Cohen of Codiam International notes that about 20 per cent of retailers have closed down in 15 months span, and sales are sluggish. “For us, the most important is selling the finished goods, whatever the margin and in some cases even if there is virtually no margin.”

Such extreme care is clearly not misplaced. Reports indicate that a mild increase in consumer spending over the first few months of 2010, reports of May and June have not been so promising. In May, U.S. retail industry sales (excluding automobiles, gas stations, and restaurants) were down 1.4 percent over April (with seasonal adjustments) and up 2.7 per cent (without adjustment) year-over-year, according to the National Retail Federation (NRF). In june, US Department of Commerce estimated that U.S. department store sales were essentially flat at $14.4 billion, an increase of a mere 0.5 percent. Total retail sales covering all segments were u

  • 4.8 percent year on year to $360.2 billion, while sales in the retail trade segment were up 5 percent for the month.

    NRF's chief economist, Jack Kleinhenz said, “Moderate growth these last few months proves that consumer uncertainty remains. A slow-growing economy and high unemployment rates will continue to hinder consumers’ decisions to spend on discretionary items."

    How is the industry coping with this scenario? We present some feedback we received from those in the market.

  • Stephen Cohen
    Stephen Cohen
    Haridasji Kotahwala, Royal India USA (Immediate Ex- Presient, IDCA)

    “We think the bottom has been reached and now there will be upward movement, particularly for new designs and innovative products. We have a wide range of choices and mostly deal with wholesalers. Currently products in the below US$ 5000 are moving very fast and in significant quantities.”

    Stephen Cohen - Codiam International Inc

    “2010 is better than 2009 for sure and there is a shortage of goods in the market. We mainly deal in 1 ct and above goods and are retailing in other markets as well. We source goods at London and Botswana sights ( or We have sights both in London and Botswana) With DTC raising prices, we are forced to sell at whatever cost can be realized, even if there is a tiny or virtually no margin.”

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