ST: Local Jewelers Boom with Selling Gold but Struggle with Retail
With the price of gold still sky high most people are not buying jewels. Money still tight for most and buying a rare metal as an ornament is just out of the question. Selling what they have for a profit appears to be more attractive.
“With the hyperinflation of gold it is now a good time for people to sell their jewelry,” said Jagger Dior, 38, owner of Grace's Jewelry store at El Paseo, which he founded in late 2009. “This is based on the simple economic philosophy of buying lowing and selling high.”
The rise of gold is quite evident, to the point that anyone who bought gold jewelry ten years ago, and still has it is already a winner.
For example, on July 11, 2002 the price of the market price for gold stood at $314.50. The price for that same amount on July 11, 2012 was $1577. In other words, approximately by 5 times since ten years ago.
The reality of the market has led Dior to focus his business on the buying and reselling large quantities of gold for a profit. Rather than on the traditional retail services that his jewelry shop still offers.
According to Dior, the refocusing of his jewelry shop as a gold buying and reselling business, has allowed him to take advantage of the gold boom. This has allowed his business to consistently increase its clientele by 2 to 15 percent on a monthly basis.
“The whole premise of my jewelry store is to buy and resell other peoples unwanted metal,” said Dior, admitting that this now makes 85 percent of his business. “The economic climate is dictating for that one service.”
However, the high price of gold has not been kind to more retail or service oriented jewelers. They are not only selling less jewelry, but also have less demand for services. Now that most people appear to be more interested in the value that comes with selling the metal.
Marlene's Jewelry, located on Tweedy Boulevard, is a store that has seen a decrease in demand for its repair services, which have historically made up the bulk of its business.
“When the price of gold rose I had to let go of my two employees,” said Daniel Gonzalez, 59, owner of the 18 year old Marlene's Jewelry. Demand has decreased by 50 percent since 2008, which was around the time that Gonzalez was forced to let go of his part-time employees. “The work that we had I could manage by myself.”
According to Gonzalez, the price for repair services, unlike gold, has also yet to show a sizeable increase. This has made things difficult for his business.
“Repair services have cost the same for the past 20 years,” said Gonzalez, who said he could not raise the price, because it would lead clients to other neighboring shops.
Forcing him to get more creative by actually manufacturing and trying to sell less expensive lightweight jewelry.
“I have created lighter models,” said Gonzalez. An approach that he claims to has led to some small growth spurts since 2008. “It is still difficult though.”
