There’s no question—this was a disappointing holiday season. No one had sky-high hopes but jewelers’ inventories were so low that some hoped for a last minute rush of orders. That happened somewhat, but not as much as people needed. The real problems of unemployment and the recession continue to hurt the market.
The middle of the market seemed to suffer the worst, although some high-end items sold nicely, proving that people with money will always spend. The low-end seemed to do the best. Stores like K mart offered what the New York Times called “dizzying discounts” of 70% off diamond jewelry (we wonder what their original list price was). The year-end saw an unexpected reversal of fortune for the dot-com sector. While at the beginning of the year, there were reports of dot-coms going bankrupt, by Christmas many shoppers who were afraid of going to local malls rediscovered the ease of shopping online.
The question is whether the disappointing holiday will lead to real problems in the market. People are nervous about further business failures. Dealers are already careful with memo and consignment.
Interestingly, none of this had any impact on prices, which remained steady for most of the year. De Beers and the other rough suppliers were conservative and didn’t hurt the market. Most cutters still will not part with goods for low prices. With interest rates so low, people feel they can hold on to their inventories because they aren’t in hock to their banks. In the 1980s, the interest rates were so high that drops in sales led to business failures.
We wish all our readers and customers a happy, healthy, prosperous and safe 2002, and hope and pray that the next year does not see anything close to the tragedy we saw during this one.