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In sign of good times,
consumers shine on
high-end jewelry
Hawaii stores are stocking
pricier gems than they have
been for the past few years
Honolulu retail jewelry sales have started to sparkle again as a strong yen and a solid local and mainland economy have provided buying power to consumers.
"In the last six months we've sold two four-carat diamond rings," said Patti Oshiro, office manager for Haimoff & Haimoff jewelers. "We haven't seen that kind of buying going on for a while."
Diamonds in that range retail for between about $43,000 and $62,000.
Haimoff & Haimoff had stopped stocking those items after 9/11 when tourism dropped and consumers grew more conservative about their purchases, Oshiro said.
But there is evidence statewide that the climate has changed, she said.
"Now that we've see there is that kind of money out there, we've started stocking larger items again," Oshiro said. "People are putting money back into luxury items."
Data for 2004 for is not yet available, but 2003 saw jewelry sales nationwide grow 4.4 percent from a year earlier, said Clifford Jackson, marketing manager for the trade organization Jewelers of America.
"It's too soon for 2004 data, but we believe that retail jewelers have enjoyed some growth," Jackson said.
Steady growth in jobs and personal income have increased consumer confidence and helped fuel the jewelry industry, said Paul Brewbaker, Bank of Hawaii's chief economist.
"It's ramping up at a pretty good acceleration," Brewbaker said. Personal income growth climbed to 6.2 percent by the third quarter of 2004 from 5.7 percent in the first quarter.
Jewelry designed by Deanna Kay for DK Finds is sold at Haimoff & Haimoff at the Halekulani Hotel in Waikiki.
According to the April 2004 issue of JCK magazine, a jewelry trade publication, the total retail jewelry market is a $43.6 billion annual business. This represents sales of 239.7 million pieces of jewelry and watches, with an average ticket price of $182. Sales at jewelry-only stores totaled approximately $27 billion.
Honolulu's rapid real estate valuations, increased business profitability and high consumer confidence levels could be fueling the decision to buy high-priced diamonds, Brewbaker said.
"It all sort of leads to a trigger point," Brewbaker said. "People have to feel well off enough to pull that trigger."
"The resident buyers are feeling good right now," Brewbaker said. "Their houses are worth more, their stock portfolios have come back and their jobs and businesses are secure."
The strong performance of Hawaii's visitor industry has also likely fueled sales, he said.
Strong performance by the yen boosted the buying power of Japanese tourists 27 percent higher than it was a couple years ago, Brewbaker said.
The exchange rate is favorable to the Japanese. In 2002, the exchange rate was 130 yen per dollar, now it's about 102 yen per dollar.
"That's a big increase in buying power," Brewbaker said. "Now that $1,000 black pearl necklace only costs $700."
The increase in domestic travelers from the economically strong western regions has also brought more domestic visitors and second-home owners to Hawaii's retailers, he said.
U.S. consumer confidence bounced higher in December to its highest level since July.
If Honolulu's ongoing holiday season is any indication, kamaaina and tourists are spending more, said Carol Pregill, president of the Retail Merchants of Hawaii.
"Designer and luxury goods and jewelry are selling this year," Pregill said. "Jewelry sales are indicative of a good economy and we haven't seen jewelry way up there in a while."
For a jeweler, the holiday season can account for 20 percent to 40 percent of yearly sales, Jackson said.
"It's a bit too early for numbers for this current holiday season, but anecdotally, I've heard positive things from people in the industry," he said. "We had been anticipating slight growth from the previous year's holiday season, somewhere in the neighborhood of 4 to 5 percent."
While tourists are known for purchasing designer items and jewelry, kamaaina are making up for lost time, Pregill said.
"They're starting to shop the designer stores," she said.
Macy's shoppers, which are made up of a mix of kamaaina and tourists, reinvested in luxury items more this year than in the past, said Deena Nichols, senior vice president and director of communications for stores in Hawaii and Guam.
"This was certainly among our best years," she said.
While tourists have always been a larger part of the business at Maui Divers Jewelry, a recent expansion into the kamaaina market paid off handsomely, said Robert Taylor, president and chief executive.
"Sales have more than doubled in the last three years," Taylor said, with total sales volume for all 45 stores growing more than 30 percent in 2004.
"This year is the peak by a long ways," Taylor said. "It's clear that women view jewelry as a necessity, just like food, water and shelter."
Maui Divers has seven new stores scheduled to open during the first five months of 2005. While some destinations are secret, the company has announced plans to open stores at the Sheraton Keahou on the Big Island, the Waikiki Marriott and in a Hilo Hattie store in San Diego.
"We think 2005 will be a very good year and we are expecting more growth," Taylor said.
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