05 Jul 2020
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A Recession like No Other, but the Industry will Bounce Back-Impact of Covid-19
The jewellery industry is not immune to covid-19. In fact, spending on luxury is one of the first things people will cut out. But if past recessions have taught us anything, cutting costs, staying connected to clients and creating jewellery that is meaningful and of lasting value will save you from sinking and when this is all over, consumers will crave human contact says Vijetha Rangabashyam
By: Diamond World News Service
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May 20 2020 11:24AM
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Reference: 24933  

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In the world economic history, nothing is comparable to the crisis led by Covid-19. As medical professionals, governments, businesses and civilians are trying to fight this unknown animal, the economy across the board is in doldrums. Consulting firms are writing long papers on the impact this deadly virus is having on businesses in various sectors. Economists have been called upon to talk on recessions. But as human lives are at stake, everything has taken a backseat, even economies. While the pandemic has led to a loss of jobs and posed the question of survival for many, luxury, jewellery in particular will have absolutely no priority in the minds of consumers. Though this may be true, if you take a good look at history, you may also find that precious adornments have braved wars, famines and plagues, still appreciating in value. Yes, people may not walk in herds to your store once the lockdown is over and there could even be a distinct shift in what they buy and how they buy, but will they stop buying jewellery altogether? The simple answer is ‘no’.

Impact on centers of luxury
On February 22nd, when the virus began to spread continuously in the country, Giovanni Ferraris was still going about his business normally, running around for delivering export orders. “But some shipments were stalled due to flights being cancelled. We finally decided to shutdown our business on March 12. There was an outpour of well wishes from clients. But things have escalated quite drastically with the whole world going into lockdown. There is no business. We are only maintaining our relationship with customers,” he says. His establishment has been exporting handcrafted jewellery from its factory in Alessandria in Northern Italy for 35 years. For heritage brand Antonini that is headquartered in Milan, the hub of luxury, things are no different. “We haven’t been able to travel abroad for any of the trunk shows and boutique events. So many jewellery fairs have been cancelled and above all, the Couture Show in Las Vegas was extremely important for us. We have been in lockdown for several days now. We are worried about the industry’s impoverishment and the probable loss of jobs, especially among small artisan businesses,” says Sergio Antonini who now carries on the history of the brand as its creative director.

The U.S. retail industry witnessed a great holiday season and it was all geared up for even better sales during Spring. Much like other countries, shopping malls and nonessential stores have gone into a complete lockdown and the measures taken in cities like New York are far more stringent. “As we saw trillions erased from global markets in a matter of days, the commodity prices have been slow to counteract. Gold for instance has been quietly tickling near its multiyear high of $1700, yet nowhere near the almost $2000 threshold of 2008/2009. Unfortunately, much of the jewellery business in the United States is very layered like the rings of the proverbial onion, each representing a supplier, vendor, middleman, broker, or retailer. Today those razor thin margins are cutting everyone’s fingers and the bleeding will not stop soon. We are still hopeful for a joyous holiday season as the world will be ready to celebrate together,” says Vin Lee of Grand Metropolitan, a multinational luxury goods holding company founded in Beverly Hills, CA in 2000.

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