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Looking Up July 01, 2010 (0 comments)

Hedda Schupak Joins The Centurion as Editor, Electronic MediaWe are very pleased to announce that Hedda Schupak, veteran industry journalist and long-time editor of JCK Magazine, has joined The Centurion as Editor, Electronic Media. She joins Howard Hauben, who will move from the role of Editor, to Publisher/Editorial Director. Below is Hedda's first editorial for The Centurion and we hope you enjoy it and welcome your comments.

 

When I was a child, one of my uncles used to talk about his “yo-yo stock.” As a 10-year-old who had just mastered “sleeping,” “walk the dog,” and “around the world” with my trusty Duncan Imperial, I thought it was really cool that he had stock in the company. That wasn’t what he meant, of course. But current economic news reminds me a lot of listening to my uncle grouse about his stock portfolio. Encouraging news one day, a sobering report the next. Still, we know that eventually it will come back stronger than before.

The question, of course, is when. Will we have the hoped-for V-shaped recovery (quick down, quick up)?  The slower U-shaped recovery, where we stay at the bottom for a prolonged period before things turn around? Or, as some doomsayers suggest, the dreaded W, where we seemingly recover only to be plunged back into recession again?

Let’s look at some indicators. On the positive side, luxury has come roaring back. In May, an article on CNNmoney.com cited significant year-over-year sales gains for a variety of upscale retailers from Whole Foods to Nordstrom, and brands from Fossil to Bvlgari. At Fossil, the growth was reported to be especially notable in its higher-end brands including Michael Kors.

But Bvlgari is luxury, pure and simple, and it seems that even the threat of a Greek tragedy isn’t keeping Europeans away from its stores. And one Montana jeweler I spoke to who recently added Rolex to his store has seen his overall sales rocket ever since.

We already knew that jewelry and watches are outperforming other categories in coming back. From holiday 2009 onward through the spring buying season, retailers and suppliers both are reporting that their high-end customers who’ve always had money are back. These customers are the ones who held back spending for emotional reasons rather than economic ones.

I’m encouraged by the growth in aspirational brands like Michael Kors, Coach, and even Whole Foods (jokingly nicknamed “Whole Paycheck”). It indicates ordinary folks feel ready to relax the purse strings a bit. Fancy food, like the proverbial lipstick, is a relatively small indulgence, making it a common place to start. 

But tempering the optimism are reports of continued high unemployment, second-quarter drops in retail sales, and a big drop in housing starts as the homebuyer’s tax credit expired in May. Yet industrial production—always a good indicator—increased a solid 1.2 percent in May, with factory production up 7.9 percent over a year ago.

What to make of all this contradiction? During the worst of the downslide, consumers slammed their wallets shut and pundits said we made a fundamental moral shift in our attitudes about consumption.  Once sales started gaining momentum, talk shifted to pent-up demand and that consumerism will remain the cornerstone of our economy.

I’m not an economist, but I predict we’ll have a U-shaped recovery—what’s to be determined is the width of the low curve—and I’ve said (and written) for years that once people get used to a certain standard of living, they don’t want to go backwards unless absolutely forced to. They may buy less, but they don’t buy cheaper.

Some were forced to change. Those who weren’t may have downscaled for a period but once their confidence returns, so will their desire for finer goods.

But I think we need to watch another current flowing under the radar of economic news. This is a rising concern for the environment, something that’s been happening but—no pun intended—is bubbling to the surface as the BP oil spill continues unabated. People are questioning how consumption impacts the earth. I believe this is a real trend and something that, more than the ups and downs of the economy, can impact consumer attitudes in the long term.

We’ll address this in future columns. For now, let’s focus on the lasting value of jewelry as a category, encouraging consumers’ innate desire to own it, and helping to keep the recovery going.

Finally, on a personal note, I’d like to express my delight at joining Centurion as its new editor of electronic media. I’ve long admired and respected founder Howard Hauben and the Centurion brand, and it’s very exciting to be part of its future growth.

You can write Hedda Schupak at hedda@centurionjewelry.com. 

 

By Hedda Schupak, Editor, Electronic Media