It’s the time of the year when the international jewellery, gemstone and watch industry turn its attention to Las Vegas. Tens of thousands of visitors from all over the world and from every segment of the industry will attend at least one of the 11 jewellery industry trade fairs in the famous gambling mecca for what informally known as “Las Vegas Jewellery Week.” This is where buyers in the U.S. build their inventory for the Christmas season. The fun begins Monday and will end June 4.
As it has been every year since the financial collapse of 2008, it is a year of reckoning in the U.S. jewellery industry. Since 2009, the industry, like the rest of the U.S. economy, has been muddling along. There are winners and losers and winners so far have been the luxury segment, which has shown robust growth for at least two years. The rest of the industry has been making little gains. Will this year be different?
So far, the answer is no. Online jewellery and diamond retailer, Blue Nile, reported a 3.6 percent first quarter increase in sales. However, lower mark-ups led to a 9.7 percent decline in gross profits. Signet Jewelers, the largest retail jeweller in the U.S. with branded chains in all price markets, has been largely the exception throughout the economic slowdown. U.S. sales for the year increased 10.6 percent to $3.03 billion and same store sales in the U.S. rose 11.1 percent.
The crowds at the 2011 JCK Las Vegas trade fair held at Mandalay Bay.
Meanwhile, on the luxury side, Parisian luxury conglomerate, LVMH, reported strong first quarter sales in the U.S. Its Watch & Jewellery division reported a 141 percent increase, year-over-year, to $826.6 million. This is a bit misleading as LVMH acquired Bulgari in March 2011. Excluding the Bulgari acquisition, watch and jewellery sales increased 17 percent. Swiss conglomerate, Richemont, reported that jewellery sales rose 32 percent for the year, with overall sales in the Americas up 26 percent.
While there are many trade fairs for Las Vegas Jewellery Week, the biggest one is JCK Las Vegas (along with its associated fairs Luxury at JCK and Swiss Watch at JCK) at Mandalay Bay; followed by the Couture Jewellery show at The Wynn Las Vegas. I will be alternating between Mandalay Bay and The Wynn during the week.
In addition to getting a grasp on the economic health of the industry, Las Vegas is where new jewellery fashion trends are introduced. In many ways economics and fashion are inseparable. During times of economic uncertainty designers get more creative with materials and design. Color and the use of alternative materials have increased dramatically in the past few years. This includes semi-precious gems, less expensive coloured diamonds and different coloured gold. The high cost of gold has caused many manufacturers and designers to look at other materials, including silver, palladium, enamel and even wood.
Whether these trends continue or if the industry starts feeling good about the economy will be among the things I’ll be looking at next week.
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