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Jewelry stores adapt by focusing on bridal business

TAMPA — Steven Bacon walked into the International Diamond Center focused on happily ever after. He wanted the perfect engagement ring for the girl who grabbed his heart in grade school.

The 27-year-old knew nothing about diamonds or their cut, color, clarity and carat. He had never heard of a gem scope, let alone looked through one. His only notable jewelry purchase had been a pair of diamond earrings for Christmas one year.

"I didn't know what I was doing,'' he said later.

His sales associate, Karen Miller, had seen his type before and walked him patiently through the process. She showed him examples of different price points, gave him an overview of diamonds and asked questions about his girlfriend's tastes.

Dozens of rings later, one rose above the rest. When his girlfriend, Kate Ward, found it sparkling in the bottom of a champagne glass, she gave her approval with a resounding, "YES!!!''

"She loved it and said I did an outstanding job,'' said Bacon, a brand manager for a fitness company who lives in St. Petersburg. "She liked that I did it alone and made it a surprise.''

Bacon is exactly the kind of customer fine jewelry stores want in these challenging economic times. While many shoppers have cut back on luxury purchases, people are still falling in love and getting married. For many couples, a diamond ring remains a must-have part of the tradition.

Stores hope couples form an emotional attachment to the place they bought their rings, ultimately becoming repeat customers.

The International Diamond Center shifted its focus toward bridal business in 2009 after sales of high-end fashion jewelry plummeted during the recession. It added designer lines, expanded showroom space for bridal sets and upped its inventory of engagement rings in the $4,000 to $6,000 range, the most popular.

"You have to be a chameleon,'' said Brian Stamey, head of the store's buying division. "If you're not adapting, you're not going to make it in this business.''

Stamey's father-in-law, Keith Leclerc, started the business as a wholesale jeweler in 1983, traveling around the country selling jewelry to large retailers. The family-run company has since expanded to eight retail locations in Florida, including its original store along Ulmerton Road in Clearwater, and one in Savannah, Ga.

In March, it opened a Tampa store along N Dale Mabry Highway, something that would have been too risky a few years ago. The store took over space occupied by Avante Gold Jewelers, which struggled through the lean times and closed in February after more than 30 years. Suanne Abeles, who owned the store with her husband, Jeff, now works as International Diamond Center's store manager.

Many of Avante Gold's customers are now International Diamond Center customers.

Diamond jewelry sales amount to $72 billion a year worldwide, a figure that has grown dramatically in the past 25 years. The United States represents the largest market, about 50 percent, according to the World Diamond Council. Japan holds the next largest slice, at 15 percent, followed by Italy (5 percent), India (3 percent) and China (2 percent). Research has shown diamond jewelry is the most sought-after category of luxury item.

The industry took a blow in 2008 when many recession-weary consumers pushed fine jewelry to the bottom of their shopping lists. Many stores consolidated or closed. Earlier this year, well-known Continental Jewelers in Tampa shuttered after 30 years.

"You saw businesses getting huge drops, and it's safe to say some have not recovered,'' said Rob Bates, senior editor of New York City-based JCK, a monthly magazine for the jewelry trade industry. "It was scary for a long time.''

Stores survived by boosting their bridal collections, buying gold and selling less expensive items such as silver, charms and beads, he said. While some high-end jewelers balked at the shift, buying gold and selling charms became traffic builders.

"A lot of people are intimidated by going into a jewelry store,'' Bates said. "This gets people through the door and allows them to think it's not so bad.''

Steve and Julie Weintraub, owners of the Gold & Diamond Source in Clearwater, said they started buying gold after they lost about 70 percent of their customer base. Loyal clients who lost money in the real estate crash disappeared. At the same time, gold prices reached historic highs.

"The business turned upside down,'' said Steve Weintraub, who has 33 years' in the industry. "We knew we had to do something. We were one of the first ones to buy gold.''

On average, jewelry stores make a 10 to 15 percent profit on gold they buy from customers and sell to refiners. The best pieces are resold at stores, but most of the gold chains and outdated or broken items are melted.

It's a competitive business made even more so by the emergence of gold-buying stores in strip centers, which have lower overhead than jewelry stores.

Stores see a spike in gold selling whenever the price goes up, Weintraub said. In September 2011, traffic doubled when gold hit $1,900 an ounce. (It was about $1,745 last week.)

Both the International Diamond Center and the Gold & Diamond Source used revenue from gold buying to invest in their bridal selections. Like other stores, they also employed coin and currency experts to do on-site valuations.

"The gold buying really bridged us,'' Weintraub said. "We've enjoyed fast growth over the last few years, but it hasn't been easy. It required us to change.''

Success has led to cramped quarters for the 7,000-square-foot store, which also houses the offices of Julie Weintraub's nonprofit group Hands Across the Bay. Next month, the store plans to open a 2,200-square-foot addition to better display its bridal ring collection, its first expansion in more than a decade.

Bates, the magazine editor, said the market is shifting toward jewelry with special meaning for the giver and receiver, like engagement rings. Rather than bling, consumers want jewelry that signifies something more. He noted the success of Jane Seymour's Open Heart collection at Kay Jewelers, the motto of which sends a mushy message: "If your heart is open, love will always find its way in.''

Bacon, whose wedding is set for April, is a new believer in sentimental purchases. He talks about Miller, his saleswoman at the International Diamond Center, as if she were a friend. He remembers every detail of his shopping experience, right down to the exciting fact that he was able to watch Alabama crush Arkansas on TV.

When asked if he'll go back there for their wedding bands, he said most definitely.

"They treated me like royalty,'' he said. "If you can't find something there you like, you're just way too picky.''

Susan Thurston can be reached at sthurston@tampabay.com or (813) 225-3110.

Jewelry stores adapt by focusing on bridal business 10/20/12 [Last modified: Saturday, October 20, 2012 5:31am]
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