NEW YORK — It’s considered among the most nonessential items that shoppers can do without, and yet it looks like one of the stars in this year’s dismal retail performance.
Average jewelry spending by shoppers with minimum household incomes of $100,000 jumped 31 percent, to $4,813, in the third quarter from a year earlier, compared with declines of more than 30 percent each for clothing and for fashion accessories including shoes and handbags, according to Pam Danziger, president of Unity Marketing.The consultancy surveyed 1,000 luxury shoppers.
“It shows signs of life that it’s recovering,” said Danziger. “Among affluent consumers, people are selectively indulging once again after a huge decline last year.”
Still, Danziger said the spending was driven by those shoppers with higher average household incomes of $233,000. “Aspirational” shoppers, or those making below $125,000, have still yet to return to the market.
As a sector, jewelry’s still struggling: For the 12 months through October, jewelry sales fell 22 percent to $22.4 billion from the same period a year earlier, with average retail prices declining 15 percent, according to market-researchfirm NPD Group.
In the case of Zale Corp., the No. 2 U.S. jewelry retailer that caters more to mass shoppers said in a regulatory filing that its comparable sales in November tumbled 19 percent.
“For lower-income consumers with unemployment at 10 percent, who has that money to spend on pure luxury?” Danziger said.
The recession and financial-sector meltdown last year have sent jewelry and other discretionary spending into a nosedive, leading to the bankruptcies of jewelry retailers from Fortunoff to Whitehall Jewelers.
Across-the-boardconsumer cutbacks also led luxury retailers from Saks Inc. to Neiman Marcus to lower merchandise prices more than 70 percent off to clear excess stock.
But the tide, at least for high-end jewelry, may be slowly turning.
At closely held luxury retailer Barneys New York, the company said improvement in the jewelry business has been very strong in the pastcouple months, without giving specifics. Barneys features a pair of $19,600 diamond slice earrings exclusive to its stores on the cover of its Christmas catalog.
Customers “are looking to be charmed,” said Judy Collinson, an executive vice president and women’s general manager at Barneys. “They want fine quality. They want things that are beautiful and have meaning and humor.”
Saks said it’s also seen relative strength in jewelry with strong sellers including $1,590 to $2,990 multiple-earrings sets that have interchangeable studs in gold and diamonds.
“Luxury fine-jewelry purchases that weren’t made earlier this year were made again,” Saks Chief Executive Steve Sadove said. “Luxury consumers are starting to feel a little better.”
Retailers operating in nontraditional channels have also seen strength in jewelry.
Hautelook, an online retailer of designer labels through limited-time sales events, said growth in its jewelry and watch category compared with earlier this year is outpacing the company average.
HSN Inc., formerly known as Home Shopping Network, said third-quarter jewelry unit growth is up 13 percent, including a 30 percent increase each in silver pieces and fashion jewelry.
“To get a great ring or necklace that updates your outfit is something that our customer is treating herself,” Mindy Grossman, HSN’s chief executive officer, said, adding the television and online shopping network has added more exclusive designer collections. “We are encouraged in the momentum of jewelry.”
Upscale specialty retailer J.Crew Group Inc. said jewelry has also been a “growing category” as it has expanded its jewelry collection from necklaces and chunky bracelets to semiprecious stones and cocktail rings.
Perhaps there’s nothing more telling about luxuryjewelry demand than sector bellwether Tiffany & Co.
The New York-based retailer in late November posted a better-than-expected thirdquarter profit after demand stronger than expected from the United States and the United Kingdom to Singapore. Tiffany also raised its full-year outlook as it said November sales at the time had tracked favorably versus management’s expectations.
Business, Pages 56 on 12/27/2009