Beads, strings and brightly colored stones are spread out across a table as the smells of incense fill the air in the basement of a downtown Lawrence building. Alia Sachedina is making jewelry in the back of , the newly renovated store she has owned for a little more than two years.
Sachedina is selling more of her low-priced jewelry to customers this holiday season because of the slow economy. She said customers were being more conservative and typically buying only the jewelry priced below $20.
"I'm not an economist, but I have a suspicion that this year will not be as good as last year," Sachedina said.
Alia Sachedina makes jewelry at African Adorned
Video by Grant Treaster
Since October, the price of jewelry materials has increased and jewelry sales across the country have decreased. Lawrence jewelry stores have also seen reduced profits. The Lawrence stores are employing different strategies this holiday season to offset the effects of the national economic recession.
The price of gold, silver and platinum has led to reduced profits for jewelry companies. According to Kitco.com, the price of gold has risen from below $275 per ounce in 2001 to more than $525 per ounce today. The price per ounce of silver doubled during the same period.
The rising costs have led to reduced profits for national jewelers. According to a Reuters article, Tiffany & Co. cut 13 percent of its U.S. staff last month. Shares of Tiffany & Co. stock fell 4.1 percent in the last quarter.
According to a Businesswire.com article, Zale Corp. sales decreased by 3.7 percent during the last quarter. Zale's stocks decreased by $1.43 per share.
Signet Jewelers Ltd., the world's largest jewelry retailer, also lost sales last quarter. According to an Associated Press article, the company's sales dropped 7 percent, and company shares dropped 6.1 percent.
She also had to raise prices during the last two months. Kingsbury, who makes about 85 percent of the jewelry in her store, said pieces that cost $20 a few months ago now cost $25 or more.
Rich Yeakel, owner of Marks Jewelers in downtown Lawrence, said profits in October and November had dramatically decreased from the year before. Profits in October were 25 percent lower and in November were 40 percent lower than the year before.
"Things were going great, and then all of a sudden it stopped," Yeakel said
African Adorned also saw decreases in sales during the last three months. Sachedina said sales dropped by 8 percent in September, 2 percent in October and another 2 percent in November.
Michael Hurst, owner of Hurst Fine Diamonds, said sales at his store dropped to below-normal levels in October, but returned to normal in November. Hurst declined to say by how much his sales had decreased.
Hurst and Sachedina said increases in the price of platinum, gold and rhodium helped to decrease the amount of sales at their stores. A piece of gold jewelry at Hurst's store that was $300 might now cost $700.
Graph showing the price per ounce of gold from Jan. 2000 to Dec. 2008
Source: Kitco.com
Sachedina usually buys jewelry from several American companies, but had to stop doing business with some of them because their prices doubled.
"Due to inflation, and whatever weird economic stimuli to the market, the price of silver has gone through the roof," Sachedina said.
Jewelry stores around Lawrence are using more sales, selling different items and looking for new customers to combat the decline in profits.
Kingsbury and Sachedina said they were using more sales to attract holiday shoppers, and hoped to see more customers during the two weeks before Christmas.
"I get a lot of guys, because a lot of them wait until the last minute to do their shopping," Kingsbury said.
African Adorned has a sale every year after Thanksgiving. But this year Sachedina extended it by three days to attract holiday shoppers with smaller budgets.
Hurst said his store's biggest month was December and that it had to have high sales to be successful throughout the rest of the year.
His store is relying more on couples getting engaged than people buying holiday gifts.
"One thing that's consistent is that people are going to get married," Hurst said.
Hurst's store is now trading customers for jewelry to combat its low sales. Customers can bring in scrap gold and trade it for jewelry, or the store will pay customers to bring in scrap metal, which they reuse.
Sachedina said she hoped women would come in to buy her smaller items. She is selling more pieces for $25 and less, and hopes customers will buy one or two items in that price range to compensate for not being able to afford more expensive items.
"It's a strange phenomenon, but jewelry makes women feel good," Sachedina said. "It makes them feel beautiful."
Marks Jewelers is also advertising its lower priced items. Yeakel is overhauling his website and spending 20 percent more on advertising in December. He said he hoped the advertising would help attract holiday shoppers.
"Yesterday was a good day so hopefully it will continue," Yeakel said.
Sachedina is selling more of her low-priced jewelry to customers this holiday season because of the slow economy. She said customers were being more conservative and typically buying only the jewelry priced below $20.
"I'm not an economist, but I have a suspicion that this year will not be as good as last year," Sachedina said.
Alia Sachedina makes jewelry at African Adorned
Video by Grant Treaster
Since October, the price of jewelry materials has increased and jewelry sales across the country have decreased. Lawrence jewelry stores have also seen reduced profits. The Lawrence stores are employing different strategies this holiday season to offset the effects of the national economic recession.
National Trends
The price of gold, silver and platinum has led to reduced profits for jewelry companies. According to Kitco.com, the price of gold has risen from below $275 per ounce in 2001 to more than $525 per ounce today. The price per ounce of silver doubled during the same period.
The rising costs have led to reduced profits for national jewelers. According to a Reuters article, Tiffany & Co. cut 13 percent of its U.S. staff last month. Shares of Tiffany & Co. stock fell 4.1 percent in the last quarter.
According to a Businesswire.com article, Zale Corp. sales decreased by 3.7 percent during the last quarter. Zale's stocks decreased by $1.43 per share.
Signet Jewelers Ltd., the world's largest jewelry retailer, also lost sales last quarter. According to an Associated Press article, the company's sales dropped 7 percent, and company shares dropped 6.1 percent.
Effects on Lawrence Stores
Julie Kingsbury, owner of Jewelry by Julie in downtown Lawrence, began to see the effects of the slowing economy in October. Kingsbury said sales in October and November were 25 percent lower than last year .She also had to raise prices during the last two months. Kingsbury, who makes about 85 percent of the jewelry in her store, said pieces that cost $20 a few months ago now cost $25 or more.
Rich Yeakel, owner of Marks Jewelers in downtown Lawrence, said profits in October and November had dramatically decreased from the year before. Profits in October were 25 percent lower and in November were 40 percent lower than the year before.
"Things were going great, and then all of a sudden it stopped," Yeakel said
African Adorned also saw decreases in sales during the last three months. Sachedina said sales dropped by 8 percent in September, 2 percent in October and another 2 percent in November.
Michael Hurst, owner of Hurst Fine Diamonds, said sales at his store dropped to below-normal levels in October, but returned to normal in November. Hurst declined to say by how much his sales had decreased.
Hurst and Sachedina said increases in the price of platinum, gold and rhodium helped to decrease the amount of sales at their stores. A piece of gold jewelry at Hurst's store that was $300 might now cost $700.
Graph showing the price per ounce of gold from Jan. 2000 to Dec. 2008
Source: Kitco.com
Sachedina usually buys jewelry from several American companies, but had to stop doing business with some of them because their prices doubled.
"Due to inflation, and whatever weird economic stimuli to the market, the price of silver has gone through the roof," Sachedina said.
Holiday Sales Strategies
Jewelry stores around Lawrence are using more sales, selling different items and looking for new customers to combat the decline in profits.
Kingsbury and Sachedina said they were using more sales to attract holiday shoppers, and hoped to see more customers during the two weeks before Christmas.
"I get a lot of guys, because a lot of them wait until the last minute to do their shopping," Kingsbury said.
African Adorned has a sale every year after Thanksgiving. But this year Sachedina extended it by three days to attract holiday shoppers with smaller budgets.
Hurst said his store's biggest month was December and that it had to have high sales to be successful throughout the rest of the year.
His store is relying more on couples getting engaged than people buying holiday gifts.
"One thing that's consistent is that people are going to get married," Hurst said.
Hurst's store is now trading customers for jewelry to combat its low sales. Customers can bring in scrap gold and trade it for jewelry, or the store will pay customers to bring in scrap metal, which they reuse.
Sachedina said she hoped women would come in to buy her smaller items. She is selling more pieces for $25 and less, and hopes customers will buy one or two items in that price range to compensate for not being able to afford more expensive items.
"It's a strange phenomenon, but jewelry makes women feel good," Sachedina said. "It makes them feel beautiful."
Marks Jewelers is also advertising its lower priced items. Yeakel is overhauling his website and spending 20 percent more on advertising in December. He said he hoped the advertising would help attract holiday shoppers.
"Yesterday was a good day so hopefully it will continue," Yeakel said.
Leave a comment