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 $14.4 billion, an increase of a mere 0.5 percent. Total retail sales covering all segments were u
NRF's chief economist, Jack Kleinhenz said, “Moderate growth these last few months proves that consumer uncertainty remains. A slow-growing economy and high unemployment rates will continue to hinder consumers’ decisions to spend on discretionary items."
How is the industry coping with this scenario? We present some feedback we received from those in the market.
“We think the bottom has been reached and now there will be upward movement, particularly for new designs and innovative products. We have a wide range of choices and mostly deal with wholesalers. Currently products in the below US$ 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.”
“The latter half of 2008 was the worst period, and we had to take strong steps during that period like reducing the working week from 40 hours to 32 and other cost cutting measures such as reduced expenditure on advertising. The certification today is about 50 per cent each on loose stones and jewellery. Now 2010 is better than 2009.”
Sushil Goyal -- Liberty Gems Inc (Currently IDCA President)
“AGTA show was positive. Retailers were buying, but don’t want to keep inventory. So wholesalers have to do that now.
We deal in designer jewellery with silver and coloured stones, manufactured in Bangkok. The ‘bigger look at lower prices’ that retailers demanded worked for us. We did well even in the worst months, up 40 per cent for 2008-09 and 30 per cent for 2009-10. Now our new range with coloured diamonds in silver is doing well – it has design variety due to the use of colur, and consumers have greater trust in diamonds.
“For IDCA I believe that it is important for us to be ahead of people’s thinking. Things have changed and we are working closely with different associations and bodies for mutual benefit.”
“Though we are up 40 per cent 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.
In the two or three shows in US this year, results have not been good, In fact response at European shows has been better than expected, and we are currently focusing there.”
Amar Jyoti -- Jain Fine Gems Inc
“The US market is slow, and will take time to return to earlier levels of business. As manufacturers of fine coloured stones, we have a fixed clientele and sell only on orders. Our clients are happy with the quality of the goods and the prices we supply them at. We have had some new contacts at shows this year, but not done any major business at them.”
Kailash Rawat -- Rawat Gems Inc
“Our sales are up 50 per cent this year and back at older levels. We are selective in what we bring to the US market – trying to bring different looking, innovative products. Unfortunately few jewellery houses in Jaipur are researching new trends and creating appropriate designs.
“Our latest success is a collection with conch pearls, which are pink in colour. These are sourced from the Caribbean and used in fusion with diamond beads in jewellery.
“We are currently very strict regarding terms of payment and are not giving goods on memo. Ironically in certain categories, sourcing from the US is cheaper than sourcing from India.”