Buxbaum Jewelry Advisors’ Stevan Buxbaum outlines strategy in Diamonds.net article
AGOURA HILLS, Calif. (5/14/10) – With Wall Street in freefall and fear of a worldwide economic collapse spreading rapidly in 2008, there was no lack of pundits predicting the impending implosion of the jewelry industry. However, even though jewelers—like most retailers focused on luxury items and discretionary purchases—have endured their share of pain since then, most have managed to keep their doors open. A big factor behind that resilience has been the industry’s success in launching gold-buying programs, Buxbaum Jewelry Advisors executive vice president Stevan Buxbaum writes in a May 2010 article on jewelry industry news site Diamonds.net.
To be sure, jewelers are still struggling, notes Buxbaum, a 20-year veteran of directing consumer product appraisals and liquidations for asset-based lenders. While operational tweaks such as inventory adjustments and cost-control initiatives have allowed many jewelers to stay afloat, his article proposes that one of the biggest reasons can be summed up in three words: “We buy gold.”
Skyrocketing gold prices and growing numbers of consumers clamoring for instant liquidity combined to form a “perfect storm” for jewelers astute enough to spot the opportunity and capitalize on it—and many have. The strategy has been “extremely profitable for retail jewelers,” Buxbaum writes. “The smelters are running hotter than ever, so jewelers have no trouble reselling these pieces. In some cases, they are even able to do ‘gold-for-store-credit’ deals—a win-win if ever there were one.”
How big a role has the retail jewelry industry’s embracement of gold-buying played in its ability to ride out the recession? The Agoura Hills-based Buxbaum Jewelry Advisors had anticipated a tremendous number of store closings in 2009, the article reports. Instead, the firm spent most of last year helping clients turn their retail operations around. About three-quarters of its engagements ended up being promotional sales designed to drive business to existing stores rather than true going-out-of-business sales, with many clients “benefiting from the irrationally high price for gold,” Buxbaum writes.
With cash-for-gold ads popping up everywhere from strip mall storefronts to the windows of mall-based jewelers to cable TV stations—not to mention banner ads streaming across thousands of Web pages—competition for this new profit-enhancing business has been intense. “Fortunately, well-established jewelers have several advantages when it comes to capitalizing on this trend,” Buxbaum emphasizes. “Smart sellers know that the design and craftsmanship of a piece can greatly affect its value. Before they commit grandma’s heirloom ring to the melting pot, they will want to talk to a trustworthy jeweler—someone who can make an informed assessment about whether the piece is worth more than its weight in gold.”
Emphasizing their trustworthiness and community standing in gold-buying ads is a smart strategy for jewelers, Buxbaum advises, especially since the high price of gold has been attracting some shady operators. While “caveat emptor” always applies, and both buyers and sellers have legitimate incentives to strike the best deal they can, jewelers can still steer business their way by emphasizing their expertise, their willingness to educate sellers and the transparency of their transactions.
Of course, gold-buying is not an end unto itself for jewelers. Theirs is a business of creativity, and an astute gold-buying strategy can help support those activities. The jewelry business is about giving customers “stylish pieces at the right price, offering great customer service and mounting smart and effective marketing campaigns,” Buxbaum writes. He adds, however, that as one of many sectors now struggling to make it through a challenging economy, jewelers “must seize any competitive edge,” and gold-buying’s high profitability “clearly is one such point of leverage.”
In addition to the above-mentioned article, Buxbaum also was interviewed in a Rapaport News broadcast segment on Diamonds.net. Besides discussing how gold-buying was helping U.S. jewelers weather the Great Recession, he spoke about the state of the wholesale market, jewelry consumers’ changing buying habits and Buxbaum Jewelry Advisors’ efforts to help regional jewelers such as Colorado designer and storeowner John Atencio boost sales and margins. With the core patrons of Atencio’s five-store chain shifting their focus to lower-priced items, BJA helped him craft a strategy to introduce more-affordable pieces that would appeal to a wider customer base and to develop a new marketing campaign. To view the broadcast, visit: http://www.diamonds.net/news/NewsItem.aspx?ArticleID=30837
About Buxbaum Jewelry Advisors/Buxbaum Group - Buxbaum Jewelry Advisors has assembled a team of jewelry professionals that have provided wholesale and retail jewelers with financial solutions for more than 20 years. It offers a wide range of services and can meet the needs of both profitable and financially distressed jewelry retailers and wholesalers. It is an affiliate of Agoura Hills, Calif.-based Buxbaum Group, www.buxbaumgroup.com which has built its reputation for over 30 years as one of the largest liquidators and appraisers of retail and wholesale inventories across North America.
Press Contacts: At Buxbaum Jewelry Advisors Stevan Buxbaum 818 878-3900; at Parness & Associates Public Relations, Lisa Kreda or Bill Parness, (732) 290-0121 , Sale contact info.: Henricks Jewelers, Bonita Springs, Fla. |
