This year, silver brings mixed results for retailers
December 17, 2013
This week’s survey focused on price points for holiday silver sales. A total of 613 retailers took the poll, which was conducted between Dec. 10 and 16.
New York--After reigning in the years of the recession, silver sales are beginning to retreat for some jewelers while others note they remain strong, as the price of gold hasn’t come down enough to move masses of consumers back to the metal.
A number of retailers interviewed by National Jeweler last week said their silver sales are down or flat as compared with last year, with customers choosing high-end diamond jewelry, gold and watches over silver.
“Silver sales have been soft for us,” says Jim Rosenheim, owner of Tiny Jewel Box in Washington. “Our business is trending toward the high end.” He adds that the “bridge area”--referring to jewelry seen as being on the border between fine and costume--has been soft at the store for more than a year.
Daniel Niebauer, vice president of operations at Ralph Miller Jewelers & Gallery in Erie, Pa., also says they’ve seen more customers gravitating toward higher-priced items, including gold.
Could it be due to gold’s lower per ounce price? Data from Kitco.com shows that the cumulative per-ounce price of gold is down 15 percent year-over-year, from $1,669 at this time last year to $1,417.
But that still doesn’t make gold jewelry cheap, retailers say, and it doesn’t even necessarily mean they can offer it at a lower price.
At Diamonds Direct in St. Petersburg, Fla. store manager Nick Gizzarelli Jr. says silver Pandora beads and bracelets are hot at the store. Customers look at gold chains but they aren’t moving too quickly as “there’s some sticker shock still.”
Retailer Susan Eisen, whose eponymous store is located in El Paso, Texas, says while the per-ounce price of gold has come down recently, the metal’s still more expensive than it was three or four years ago.
Kitco data backs up this claim. In 2009, the cumulative average price of gold to date was $972 an ounce and in 2010 it was $1,225, lower than the current year’s cumulative average of $1,417.
At her store, customers have adjusted to the idea that they’re buying designs in silver instead of white gold. Holiday silver sales are strong annually, and this year is no exception.
The store’s best-selling line is Lagos, a line Eisen first bought into 21 years ago.
At the time, they wondered if designer sterling silver was just a fad. More than two decades later, “we are still selling it like crazy, designer silver,” she says, adding that other top brands include Scott Kay and Artistry.
Overall, she says the lower price of gold hasn’t affected customers’ mindsets.
“People don’t watch the market like we do. Plus we (retailers) haven’t bought a lot (of gold). A lot of jewelers didn’t buy a lot when the price was high,” Eisen says.
Price-wise, National Jeweler’s second holiday poll of the year shows that 85 percent of retailers expect the majority of silver sales to be $1,000 or less.
Breaking that down, the greatest percentage of jewelers who took the survey, 69 percent, said silver jewelry sales would be $500 or less while 16 percent expect the lion’s share of sales to fall in the $501 to $1,000 range.
A total of 10 percent of those surveyed said the majority of silver sales would range between $1,001 and $3,000 while only 6 percent expected most silver sales to ring up to more than $3,000.
Retailer Jim Alperin, whose eponymous shop is located in Pepper Pike, Ohio, a Cleveland suburb, says his silver business is up year-over-year but there’s two distinctly different groups of silver shoppers: those buying pieces priced at $1,000 and up and others who are purchasing pendants for $82.
“Silver has taken over a larger part of the market. I wouldn’t even carry silver at the start of (my) business because I didn’t really even think of it as fine jewelry then,” he says. “But now we’re doing really well with silver and diamond bracelets and we think that will continue for a while.”
--Senior Editor Hannah Connorton and Associate Editor Brecken Branstrator contributed to this report.