Local jewelers deal with economic downturn

Diamonds may be a girl's best friend, but tough economic times can make an impact on even the best of friends - the local jewelry industry as a whole, in fact.

“Diamonds, engagement rings and wedding rings are the majority of our business and always have been,” said Steve Ginsberg, vice president of Ginsberg Jewelersin Cedar Rapids.

“But discretionary spending has dropped as a result of the economy and gold and platinum prices. Our average sale has decreased in the last three years.”

Willa Dickens, co-owner of Herteen & Stocker Jewelers in Iowa City, agreed that diamonds remain a big part of the jewelry business.

“People still get engaged and married and still celebrate anniversaries or other holidays during tough economic times,” he said, “and the diamond is still the preferred gemstone for all those occasions.”

But he, too, noted a tough retail environment, which he dates from the 2008 floods.

“This big impact started with the flood and went hand-in-hand with the economy.”

Weathering economic downturns is not new to local jewelers, as they are often long-established businesses. Ginsberg Jewelers was opened in Cedar Rapids by Steve Ginsberg's grandfather Isadore in 1933.

“We are contributors to the economic, social and cultural fabric of this community,” Ginsberg said. “Not mere observers, our hat is in the ring just like everyone else here.”

Dickens concurred that local jewelers can have longevity and good reputations going for them.

“We have a third generation of people buying diamonds from us,” he added.

Herteen & Stocker opened in downtown Iowa City in 1945.

But despite such staying power, market conditions over the past three years have been among the toughest, in Dickens's opinion.

Herteen & Stocker saw a 25 percent to 30 percent decrease in sales during the time of the flood.

“We had to reduce our work force by attrition,” Dickens recalled. “We were working at the equivalent of two less full-time employees.”

While no one lost their job during the tough conditions, Dickens is happy to now be back to his full staff of 10 employees.

Ginsberg Jewelers also adapted. The store now carries more sterling silver jewelry, which costs less than gold and platinum, for example. It also eliminated stocking and selling figurines, due to a decrease in demand.

The Cedar Rapids jeweler also has incorporated an online program, called Debut, in which customers in real time can design their own jewelry, see the estimated price on today's metals market, have it manufactured to their specifications and delivered within eight to 10 days.

In the brick-and-mortar store, Ginsberg Jewelers installed “an open interactive ring stand” that allows “customers to reach out, touch, take out and try on rings and other jewelry without even asking my staff for assistance,” Ginsberg said. And the good news is, things seem to be looking up.

“From 2010 to 2011, we have seen a 12 percent overall increase,” Ginsberg said. “Sales of engagement and wedding rings alone are up by 20 percent.”

“So far this year things are looking better,” Dickens agreed. “When the stock market is stronger, customers suddenly feel they can afford to do something for themselves or others.”

Economic conditions also have an impact in other ways. With the rising cost of gold coupled with the down economy, contemporary metals are increasing in popularity.

“Tungsten carbide steel, titanium, cobalt chrome and ceramic are all sought-after for wedding bands ...,” Ginsberg said.

“Contemporary metals are fabricated, not precious, so their prices are a fraction of gold, platinum and palladium.”

Ginsberg pointed out his company bought gold, platinum, silver, diamonds, and gemstones even before it became the thing to do in “these economic times.” And he added that it wasn't until the price of gold and platinum skyrocketed four years ago that contemporary metals began to be used more widely in the jewelry industry.

“The promotions to buy gold have probably increased our purchases of precious metals 30 to 40 percent over the last two years,” he said.

While the business has long been listed under several yellow pages headings, Ginsberg said that for the past four years it's also purchased a listing under “gold, silver, platinum buyers and dealers” to capitalize on the opportunity.

After the 2008 flood, Ginsberg Jewelers moved from its downtown location to a free-standing, “visible and accessible” retail space in the Marketplace on First Shopping Center.

“As it happens, most of Cedar Rapids's locally owned jewelry stores are within sight of each other out here, just as we were decades ago downtown,” Ginsberg said. “This location is where the retail action will be in Cedar Rapids for the next 25 to 50 years.”