Upscale trend affects costume jewelry sales

Discount Store News, June 8, 1987

Upscale Trend Affects Costume Jewelry Sales

True or false: Color is out. Color is in. Service is haphazard. Service is just fine. Upscale is the way to go. The basics are going great guns.

All the above statements are true depending upon who you listen to in the highly volatile, trendy, $2 billion costume jewelry market.

Color, which in recent years has been responsible for up to half of sales in costume jewelry, may be on its way out and a classic, romantic look on its way in, said some discount buyers and suppliers.

Eric Marsh, buyer for Worthington, Ohio-based Gold Circle stores, said he is sad to see the color trend go. "It [color] has been so dominant over the past three years or so that it will be tough for anything to replace it,' he said. Marsh added that he expected antique and romantic looks to be popular this fall.

Andy Cohan, assistant vice president of Ames Department Stores, questioned whether the demand for color has lessened. "Color will remain a very significant part of our business' this fall, he said.

"The color business is changing fast,' said Jamie Boblitt, marketing vp for Accessories Associates Inc. (AAi), a supplier. "The traditional color palette in bright enamels is being replaced by burnished metals. There's still some color at the discount and drug level, but there's no color at all at forward-fashion outlets like The Limited.'

Gold Circle's Marsh is more concerned with service, which he said is "inadequate' for his needs. "Manufacturers are just too rigid,' he said. "Our secret weapon is our wholesaler, Capitol Distributors, which supplies our basic program and has a rep in every one of our stores virtually every day, if needed.'

The result, said Marsh, is that "Gold Circle is building a reputation for fashion jewelry and sells more per foot per store than any other mass merchandiser.'

Cohan at Ames said he has less anxiety about service. "Like anything else, there's always room for improvement, but it's in their [manufacturers'] interest to improve, and most of them are.'

Unpredictability in Sales

Rising prices of imports and general upscaling throughout the industry have brought an unpredictability to costume jewelry sales, buyers said.

Discounters agree that prices are evolving upward, but they seem optimistic about the brand name appeal suppliers are trying to bring to their jewelry departments.

Sarah Coventry, which first sold to the discount market a little over a year ago, and Faberge, which will enter the market for the first time this fall, described themselves as bridges between fine jewelry and traditional costume jewelery. Both companies carry price points considerably higher than most discounters are accustomed to selling.

Said Gold Circle's Marsh, "Most women recognize the Sarah Coventry name from when the company used to sell in homes and they like the product.' Ames' Cohan added, "It's a very viable brand name, and customers seem to feel that it represents quality at a good price.'

That's music to Sarah Coventry's ears, of course. Said marketing director Frank DePaolo, "According to our research, 85 percent of women know our name and that name connotes quality to them.'

Faberge can play the numbers game, too. According to its research, 98 percent of Americans recognize the Faberge name. "I don't know where the other two percent have been,' said Michael Paltrowitz, president of Jewelmark Originals, which will market the Faberge line.

Ames' Cohan said that the Faberge line, which he and his buyers haven't seen yet, has potential. "This is a great brand name,' he said. "Their success will depend on how much marketing they do behind the product. Their price points should be viable for the outlets they're approaching because they must have done their homework.'

The upscale move is very real at Gold Circle, Marsh said. In what he termed a "logical' step up, earrings, which generally retailed for $3 to $5, now are as likely to sell for $6 to $12. Necklaces go for up to $25 and coordinated sets at around $15 are "very hot.'

However, Marsh noted that "the demand curve is inelastic. Costume jewelry is an impulse purchase only up to a point--make it too expensive, and there's no impulse.' To merchandise effectively, Marsh said, there has to be great product breadth and an image of exclusivity.

"It's a very personal item,' he said, "and having 200 identical pieces in stock will turn a customer right off. Consumers will pay $15 or $20 for a good product, but they want exclusiveness. Just like you wouldn't put out a whole rack of the same kind of expensive dress, you're better off showing just one sample of the more expensive pieces.'

In keeping with the breadth, not depth approach, Gold Circle's fall advertising will offer "over 10,000 styles, colors and finishes of earrings.'

At Ames, the accent is on "stabilizing' certain price points, which Cohan identified as "mid-price.' "We're finding that it's best not to be all over the board in price,' he said. "We try to cover all bases, but remain deep at the five or so price points that are most important to us.'