The jewelry industry was awash in good tidings and cheer for the 2003 holiday season. Consumers consumed in a way that had some merchants making comparisons to that greatest of all years—1999—according to telephone interviews by JCK and other industry sources. Overall, higher-end and luxury jewelers fared the best.

“It was our best year since 1999,” said Bill Underwood of Underwood Jewelers, Fayetteville, Ark. “Probably some of it had to do with the news coming out of Iraq. People generally had a more positive attitude.”

Jewelry industry analyst Ken Gassman estimated that overall holiday sales for independent jewelers were about 5% better than the prior year, with chain jewelers outperforming independents. “Chains bombarded consumers with ads that caused the flip-flop in sales,” he said.

Other trends included:

• Among independent jewelers, the South and the West Coast reported the strongest sales while the Middle Atlantic, Northeast, and Midwest states experienced mixed results. Few retailers knew what to expect or could explain why sales were up or down.

• The right-hand ring was more popular at chains than independents. Some independent jewelers said the concept was too new to push for the 2003 holiday season, but they expect it to gain more favor with customers. Other jewelers said they didn’t push the product because they’ve always sold right-hand rings, but under different names (e.g., “cocktail rings”).

• Diamond jewelry was the biggest seller. Three-stone diamond rings continue to do well, along with diamond pendants, diamond stud earrings, and diamond bracelets.

• Diamond dealers were generally upbeat even though sales didn’t reach the 8% goal set by De Beers.

• Overall, the retail sector had a strong year, credited to a flurry of late-season sales.

• Internet sales were at least 25% higher than the previous year’s figures.

Strong sales in the South. It was a good year for independent jewelers south of the Mason-Dixon line. Monty McGee, owner of Farnsworth, Greenville, Miss., said 2003 was good for the local agriculture industry, and that was reflected in strong holiday sales for the jeweler. “Sales for December were very good and a lot better than last year,” McGee said. “Agriculture was very good in our area, but I feel like the overall economy was looking positive.”

At Optimus Jewelers, Nashville, Tenn., owner Mike O’Connor said 2003 was the store’s best season since it opened five years ago. “I felt like it should have been a good year because there was no calamity before Christmas,” O’Connor said.

Bob Cook, owner of Van Scoy Diamonds, Greensboro, N.C., said his sales were up 12% over the previous year. “Frankly, we were anticipating flat to a couple percentage increase,” he said. “What was most surprising for us was that the average ticket was smaller this year [$650 to $675], but we sold more units—mostly diamond pendants and earrings, along with some fashion rings.”

The Mountain and Midwest states. Heading west toward the mid-section of the country, the season saw more good news for the majority of retailers, but it was mixed with some disappointment.

“It was a very unusual year where we actually beat last year’s numbers, which thrilled us to no end,” said Susan Eisen of Eisen Fine Jewelry, El Paso, Texas. “We probably did 5% better, although we had a few more returns than we would have liked.”

Charles Zerbe of Zerbe Jewelers in Colorado reported that his store exceeded expectations by 6%, missing its sales record by just $6,000. But in Denver, Colo., Jay Feder of Jay Feder Jewelers said holiday sales were flat.

Richard Homes, owner of Duke’s Jewelers, Springville, Utah, also reported holiday season sales increases of 7% over last year’s results. “This year we didn’t sell as many high-ticket items, but we had a lot more traffic,” he said. Meanwhile, in Salt Lake City, Utah, Bill Bennion, owner of Bennion Jewelers, said holiday sales were down 5%.

Small purchases also were the norm at Hopman Jewelers, Elkhart, Ind., and Becker’s Jewelers, Mount Pleasant, Iowa. Both reported modest growth for the season. “We probably did better overall than last year,” said Dana Green, inventory specialist at Hopman Jewelers. Bill Becker, owner of Becker’s Jewelers, said a strong showing in October and November led to a 5% sales growth for the season. He credited that to early promotional practices that included phone calls and mailings as early as October.

The Northeast and Middle Atlantic states. In the nation’s top population area, early December snowstorms hurt some businesses, but for those who did not do well, struggling local economies were blamed.

“[December] was an absolutely terrible month,” said Jean Bolten of T.H. Bolten Jewelers, Rochester, N.Y. “We had 13 sales the entire month of December. We dropped 31%.” Bolten says the decline mirrors the business climate in downtown Rochester, where the store is located.

Jim Rogato of Sawyer Jewelers, Laconia, N.H., said sales were flat for the season. Scott Cusson of Brinsmaids Inc., New Cannan, Conn., also reported flat sales.

Meanwhile, Alexander Rysman of Romm & Co., Brockton, Mass., saw sales increase by 10%. “There were some snowstorms that scared [shoppers], but things worked out,” he said.

In Chapmanville, W.Va.—an area hit by several floods, closing coalmines, and competition from big-box retailers like Wal-Mart—business was described as “okay, not great,” by Valorie Gore of Gore’s Jewelry Box. But not far away, in Washington, D.C., Jim Rosenheim, CEO of Tiny Jewel Box, called the holiday season “pretty spectacular. I was surprised at the strength of our business,” he said. “I’ve never seen anything like it in 45 Christmases. It just feels like the stars were aligned the right way.”

The West Coast. Linda Abell of Sarah Leonard Fine Jewelry, Los Angeles, described the 2003 holiday season as “fabulous.” With December sales up 34% and November and October sales up 31%, Abell may have been one of the biggest winners among her peers out West, but she was hardly alone.

“We had a great holiday season,” said Tim Greve of Carl Greve Jeweler Inc., Portland, Ore. “It exceeded our expectations by double digits.”

Even far from the large metropolitan areas some jewelers had an exceptional year. Pat Bowlby, owner of Main Street Jewelers in Klamath Falls, Ore., on the California border, said business was up 54%. “We expected about 10% growth,” he said.

Still, a few jewelers reported flat holiday sales or declines compared with 2002: Touchstone Jewelers Inc., Kennewick, Wash., reported a slight decline, and Long’s Jewelers of Carson City, Nev., reported flat sales.

Luxury jewelers. Upscale retailers reported seasonal sales up more than 10%, with substantial increases in sales of large (2-ct.-plus) diamonds and three-stone diamond pieces. The best sellers were items backed by heavy advertising: three-stone pieces, diamond earrings, proprietary diamond cuts, and luxury watches.

“Things went really well. Sales were much higher than last year,” said Lauren Kulchinsky of Mayfair Diamonds and Fine Jewelry, East Hampton, N.Y.

Luxury retailers said they were helped by a strong last-minute shopping surge. The final Saturday before Christmas, and even Christmas Eve, were stronger buying days than “Black Friday” after Thanksgiving.

Christmas was “ridiculously late,” said Cindi Earl of Cindi Earl Fine Jewelry, Nashville, Tenn. “We had 20 men in here on Christmas Eve—and we’re a small store. I’ve never seen anything like that.”

Tom Newcomer of R. Bruce, Hagerstown, Md., said sales were up 10% in December and 20% overall. “The holiday started slow because of the weather, but it came in at the end.”

Chain stores. Overall, sales at the chains met or exceeded projections. Zale Corp., said its comparable store sales increased 4.1% for November and December. Total revenues for the period were $843 million, a 4.3% gain over the 2002 holiday period.

For Sterling Inc., the second largest North American jewelry retailer, Christmas holiday sales for the eight weeks ending Dec. 24 rose 6.4%, on a comparative store basis, and increased 6.4% and 6.5% for its London-based parent firm, Signet Inc. Sterling’s mall and Jared stores both performed well.

Tiffany & Co.’s U.S. retail sales increased 19% to more than $306 million, the company reported. Comparable store sales rose 16% (up 14% in November and 16% in December), comprising a 22% increase at Tiffany’s New York flagship store and a geographically broad-based 14% increase in branch stores. Growth in comparable store sales was driven by an increase in the average amount spent per transaction, the company said in a statement.

Kings Jewelry, a 48-store chain headquartered in New Castle, Pa., reported sales gains of 5.5% for the season. CEO Dale Perelman said much of the extra business came from larger diamonds.

Mayors Jewelers, an upscale 40-store chain headquartered in Sunrise, Fla., said gross sales increased 14% for the season, while same-store sales increased 15%. And at the other end of the country, Ben Bridge Jewelers, a 72-store chain in 11 states that focuses on better-quality pieces with no discounting, noted sales gains near 10%. “Every class was up,” said president and CEO Edward I. Bridge. “Diamonds were strong, watches were strong, color was strong. … Right-hand ring sales were strong and gave a great push to business. Three-stone rings remain strong.”

John Cohen, president and CEO of Carlyle & Co, a 36-store chain headquartered in Greensboro, N.C., said his business saw single-digit increases in November and a double-digit jump in December. “The first week of December was out of sight after a fantastic November, and we thought it would be a world record,” Cohen said.

Diamonds and gemstones. Diamond sales grew 3% to 5% for the holidays. De Beers had hoped for an 8% increase. “People expected to do earth-shattering business,” said Harvey Lisker of Absolute Brilliance. “Just about everybody did better than last year, but some did not hit plan, because the plans were so aggressive.” Still, many were happy with results—and some were downright ecstatic.

“October, November, December … every month was a record,” says A.D. Klein of Julius Klein. “Whatever we had, we were able to sell.”

In general, higher-end goods seemed to do better than lower-end, and bigger companies better than smaller ones. The goods most in demand were high-color stones of VS-SI clarity, and dealers had trouble keeping them in stock.

“The supply side was a big problem,” says David Gross of Gross Diamond Corp. “Sales were missed because the merchandise just wasn’t available.”

Colored stones saw some resurgence, particularly among several major chains and department stores. Retailers reported that best sellers included traditional standbys—such as tanzanite and sapphire—and larger, fashion-oriented pieces using aquamarine, amethyst, citrine, and peridot.

The controversial corundum treatments—diffusion and the yet-unnamed process used on Sri Lankan sapphires—have not affected sales at retail, jewelers noted.

A strong season for retail. A late flurry of consumer activity during the last days of the Christmas shopping season turned it into one of the strongest since 1999. U.S. retail sales for December rose 6% over the same month in 2002, ShopperTrak reported in its National Retail Sales Estimate (NRSE). And November-December combined sales grew by 4% in a year-over-year comparison, according to the International Council of Shopping Centers Chain Store Sales Index. Comparable-store sales overall also grew by 4%, according to the Goldman Sachs index of same-store sales.

Internet continues to grow. ComScore Network, a consumer research firm, reported that online retailers racked up $93 billion in sales last year, a 27% increase over 2002. Online retail spending during the holiday season totaled $12.5 billion, a 29.5% gain over the same period last year. Jewelry represented one of the fastest-growing categories of Internet sales, noted ComScore analyst Graham Mudd in a press statement.

Online jewelry retailer Mondera reported a 45% sales increase for the season. CEO Fred Mouawad noted the increase was 10% above forecast, led by diamond stud earrings.

The “Shop.org/BizRate 2003 eHoliday Mood” study reported that 59% of retailers reported revenue growth of 25% or higher for the 2003 online holiday season, with 30% reporting revenue increases of 50% or more. And consumers were largely satisfied with their online shopping experience, according to the survey: Almost 90% of shoppers were “somewhat” or “very satisfied” with their online buying experience, up from 84% in 2002.