National Jeweler interviewed five D.C.-area jewelers both before and after the shutdown to gauge their outlooks for 2019. Pictured here is Jenny Caro’s store, Jewelry By Designs, in Woodbridge, Virginia.
Washington, D.C.—The federal government shutdown began on Dec. 22, a few days shy of Christmas.

As it stretched past the 30-day mark, the tendrils of its impact snaked their way through airports, as TSA agents working without pay called out sick, and into grocery store aisles, as Food and Drug Administration officials temporarily cut back on routine inspections.

National Jeweler reached out to jewelers at the heart of the political arena in the Washington, D.C. area both before and after the shutdown to learn how it impacted their stores and gauge their outlooks for 2019.

Just Another January?
“I can’t say we saw it coming, but we are fortunate that it didn’t happen until the end of December,” said Jonathan Mervis of Mervis Diamond Importers, a Washington-area jewelry business with South African roots. “We would’ve had a worse situation (had it happened earlier in the holiday season).”

He said by that time in December, most of his customers already had finished their Christmas shopping.

The typically slow month that follows made it difficult to gauge if the shutdown was behind the wane in business or if it was just another January.

“For most other months, D.C. is an incredible place to be,” Mervis said. “This is a temporary blip.”

Jim Rosenheim, owner of Tiny Jewel Box, a family-run D.C. fixture since 1930, knows what an incredible location the city can be, having served political heavyweights like the Obamas and Madeleine Albright, the pin-loving former secretary of state.

Being right in the middle of it all makes Rosenheim’s clients acutely aware of what’s going down on Capitol Hill, which he believes could take a toll on consumer sentiment long after the end of the shutdown.

Afram Jewelers, which opened in 1971 just steps from the White House, has been through this before and owner Miriam Afram said shutdowns before Christmas can be especially devastating, but the timing of this one wasn’t as bad as it could have been.

While the Christmas rush might have been preserved, Afram said the most frustrating aspect for small businesses in the area is the lost income that can’t be retrieved. She estimated that every third customer is a federal employee.

“There will also be a latent effect of the low morale and discouragement for federal employees, which will certainly affect their buying habits long term,” she said.

The fear that a rough January is a sign of a tumultuous year to come weighs on Afram and has others worried as well.

February Fears
Jeweler Jenny Caro’s shop, Jewelry By Designs, sits just 30 minutes outside of the capital in Woodbridge, Virginia.

Situated in a popular suburb for D.C. commuters, she estimated that close to 80 percent of her customers are government employees.

With the potential of another shutdown looming, Caro is concerned about Valentine’s Day sales and lamented that the government had “no concept of the repercussions” on retailers.

Restaurants and coffee shops in her area were giving away free food and drinks to help out and retain their customer bases.

While Caro was able to throw in free watch batteries for a customer serving in the Coast Guard, large-scale, long-term free giveaways aren’t viable options for a jewelry store.

The challenge has been getting customers to come in the door, Caro said. When their economic future feels uncertain, the last thing they’ll buy is jewelry.

The store plans to offer Valentine’s Day packages with lower price points for struggling customers, including a $99 bundle that includes long-lasting roses, a box of chocolates, and pearl stud earrings.

“We’re just trying to do whatever we can to be proactive, to reach out to current customers,” Caro said.

Brian Mann of David Mann Jewelers, which has operated inside the Pentagon since 1945, is hopeful for Valentine’s Day though not entirely without concerns.

Mann said he was fortunate that the Pentagon workforce was present throughout the shutdown as the U.S. Department of Defense was funded back in the fall.

The store’s location in a government building means keeping the same schedule as the building’s hours of operations, ending the day at 5 p.m. and closing on weekends and national holidays.

Mann said he hopes to avoid a second shutdown, which would start on Feb. 15 and could put holiday sales in jeopardy.

“We have always have had a strong Valentine’s Day business; we always call it our little Christmas rush. Let’s hope for one again this year,” Mann said in an email to National Jeweler.

A National Gauge
The anecdotes and experiences of D.C.-area jewelers are reflective of consumer sentiment across the United States, whether steps or miles away from the White House: The shutdown has everyone at least a little shook up.

The Consumer Confidence Index dropped by 6.4 points to 120.2 in January following a decline in December, according to The Conference Board by Nielsen.

The Expectations Index, which is based on consumers’ short-term outlook for income, business and labor market conditions, dropped from 97.7 in December to 87.3 in January.

The percentage of consumers expecting business conditions to improve over the next six months fell from 18 percent in December to 16 percent in January, while the percentage who expect them to decline rose from 11 percent to 15 percent.

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However, Lynn Franco, senior director of economic indicators at The Conference Board, said The Present Situation Index was virtually unchanged, suggesting economic conditions overall remain favorable even if consumer confidence did take a hit due to financial market volatility and the government shutdown.

“Shock events such as government shutdowns (i.e., 2013) tend to have sharp but temporary impacts on consumer confidence,” she said in a note accompanying the index, noting that January’s decline was more the result of a “temporary shock” than a precursor to a significant slowdown.

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