Jewelryis a more resilient sector than others, according to Gina Drosos, the chief executive officer of Signet Jewelers (SIG), despite the fact that the possibility of a slight recession in 2023 has weighed on numerous stores and industries.
Why jewelry 'does much better than the rest of retail' during tough times? The explanation of the CEO of Signet is as follows:
Drosos was quoted on Yahoo Finance Live as saying:
You know, jewelry is not immune to macroeconomic pressure, but I would say it's very different from most of the rest of retail. Jewelry inherently holds its value, and customers know that. So they know that if they buy a nice piece of jewelry, it will be worth at least the same, if not appreciated, a year later. So we see in tough times, even including recession, jewelry actually does much better than the rest of retail.- Gina Drosos
Drosos might be right in her assumption.
Signet, the largest retailer of diamondjewelry in the world, achieved topline growth of $1.6 billion during its fiscal third quarter, with revenues increasing by 2.9% year over year. During its results call, the firm sounded optimistic about the upcoming holiday season, citing growth in website visitors as the primary reason.
Tough economic times are opportunity to capture even more market share, says Signet CEO
One of our strategies has been to lead digital commerce in the jewelry category. It's a category that traditionally was very brick-and-mortar based. People only went into a store so they could be consulted or try on the product. Now we're actually selling a lot of jewelry online, but [it's] mostly browsing. 67% of our customers go online before they come into the store.- Gina Drosos
In addition, Drosos noted that when customer preferences shift, there is a possibility that demand for jewelry with lower price points would decrease.
Drosos noted that 2016 was a banner year for jewelry sold at more affordable pricing points. "Stimulus was in the market, people really spending on themselves, which was great to see. Self-purchase tends to be a lower-priced purchase than bridal or romantic gifting, so we saw a big increase last year. That's been offset this year somewhat."
In the market for jewelry with low to medium prices, Signet is the undisputed leader. The corporation is the owner of several brands, some of which include Jared, Kay, and Zales. It also acquired Blue Nile in October.
Drosos made the observation that "we are still up on a stacked basis. But we've seen lower-income customers be more challenged. You know, discretionary price increases are impacting their discretionary spend more so than higher-income customers."
Despite this, Drosos reported that the value of transactions increased by 8% during the quarter and by 27% when compared to the same period three years before.
She stated that a significant component of that was acknowledging the fact that clients with lower incomes would face more difficulties and respond accordingly.
Drosos stated that "for that [lower-income] customer, we've added value-engineered product really to give them a great value, financing alternatives. But we've also pivoted our marketing and our assortment to attract a higher-end customer."
An additional argument in favor of validating the reason the CEO claimed that the jewelry industry does far better than the rest of the retailing industry. Even throughout the difficult times, people did not forget about the jewelry for the following reason:
According to catherinegrizes, trophies aren't just small goldsculptures. People often receive jewelry as a token of appreciation for their accomplishments, as well as a reminder of how powerful and strong they are in terms of their perseverance and tenacity.
People are honored with pins and medallions when they receive presidential and military rewards. The most accomplished athletes are honored with a medal that is worn as a necklace around their necks.
The Inspiring Women Project gives a silvernecklace award to women who are recognized for doing positive things for their families and communities. This is a more approachable way of expressing the project's goals.
It is a good idea to commemorate significant life events, such as graduations, promotions at work, or other goals reached, with a piece of jewelry because this is an excellent method to continually be reminded to feel proud of our capabilities.
When we put on that jewelry, we remind ourselves that we are capable of doing anything we set our minds to.