Gas prices crack the $4.00 mark and many fashion retailers feel concern about how the economy will impact business. There’s no crystal ball to the future, but historical information through the lens of a jewelry wholesaler may provide surprising encouragement.
Let’s begin with the recession of 1980 to 1982. The Iranian revolution led to erratic oil production and rises in gas prices. This was before the internet gave worldwide exposure to local businesses and our lens focuses from South Louisiana, which was in boom times because of offshore drilling. The recession hit South Louisiana in 1983 with the oil bust when price per barrel tumbled. Oil dependent cities saw 20% to 25% unemployment, equivalent to The Great Depression.
The following January, only a few months later, twist beads became a fad and retailers experienced a buying frenzy unequaled by anything before or after. Women would rush to retailers on their lunch hour and spend $60 to $80 getting more colors and textures to create this hot new look. Remember, all of this is shortly after the oil bust that devastated the area.
Fashion jewelry and accessories saw steady growth from this point. The next recession struck in 1990 to 1991 with a decrease in manufactured goods. But many retailers in fashion jewelry and accessories were totally unaware of slow economic times as they set a record breaking year in 1990 followed by a very good year in 1991. Fashion jewelry was at the top of its game with large dangling earrings making a big impact. Wholesalers were receiving regular shipments of these dramatic baubles and selling out just as quick.
In addition to fashion jewelry being hot, something else was taking place that had an unexpected result. The UN coalition was gathering in the Middle East for the Desert Storm operation and this included a high number of American troops. The nation rushed to retailers in search of anything Americana to show support for the troops. This caught retailers off guard. They scrambled to find the jewelry and accessories customers were frantically searching for and the limited supply was usually never enough. This was a helpful addition to a time already bolstered by brisk fashion jewelry sales.
As time moves towards the mid nineties something happens that puts to rest the idea that the economy accounts for good sales in fashion jewelry and accessories. Nightly news was raving about economic growth, but a new trend of minimalism was quietly building. It started with interior design and furniture and then Prada introduced an understated style in neutral colors that caught on and took fashion to the natural look. Color was gone as well as dramatic statements and the fashion jewelry industry from manufacturers to retailers was struggling. Two piece knit suits were also a rage and belts all but disappeared for a decade. In the height of a good economy, fashion jewelry hit a low point showing its success depended far more on fashion trends than on the economy.
The 21st century arrived and a new recession hit the American economy from 2001 to 2003. In the stock market dot com businesses were failing and then the tragic September 11th attack took place. Everything was at a stand still. America was stunned; retailers were stunned. America united and people reached for a way to express their feelings. Selfishness disappeared as nationwide people opened their wallets to help victims.
The country stood united, all differences aside, and again they returned to retailers for every imaginable item in Americana to express their support and feelings. Retailers filled a human need as they went through a recession they hardly knew existed.
During these extraordinary times, Estee Lauder noticed an unusual behavior. Department store sales of high priced items fell as lipstick sales increased. This coined the phrase, “the lipstick effect”. The bottom line is people continue to buy items because it creates a good feeling. When economic conditions are lower, they buy lower priced goods. This is far more important to the average retailer of fashion jewelry and accessories than they may realize.
Look at all the movement in the economy that we have covered over the last 25 years. The average retailer is not in luxury goods. Their market is affordable fashion jewelry and accessories-the feel good items that can transform last year’s outfit into something new and exciting. They provide an affordable uplift for people. They fill the needs of expression for people when even the most tragic events happen. They are part of the fragile entrepreneurship consumers can identify with. They fill the local niches the majors don’t care about and nobody gives more personal service.
For everyone in the fashion jewelry and accessories business, don’t let economic forecasts rattle you. Economic slumps can even help you by shifting luxury money to your more affordable merchandise. History shows that trends are a major factor in your business and not the economy and now the trends are in place for success. Today’s fashion trends favor color and bold size. Just serve it up with some enthusiasm because your customers are coming to you for a feel good experience.
By: Michael Gietl
About the Author:
Mike Gietl has a 23 year association with Accessory Wholesale Inc a company that provides wholesale jewelry and fashion accessories.
