Member Spotlight Review - Jenny Luker sheds light on the PGM jewellery market
26 April 2021 \ Sarah Masterson
Jenny Luker – President @ Platinum Guild International USA Jewelry inc. New York
The following is an overview of the US Jewelry industry at-large, a review of gold and platinum jewelry business activity as well as PGI USA program activity and its impact on the global platinum jewelry market.
US Jewelry Industry At-Large:
- 2020 was a year that saw epic declines in business during Q2 as the COVID 19 pandemic shut down all but essential businesses in the US. While this was likely the most unusual business climate in our recent history, the recovery period has been quite remarkable as well.
- When the coronavirus pandemic exploded in the US in March, jewelers and retailers of all kinds (except those selling food, cleaning products, and other essentials) wondered if they’d ever recover. As we now know, by June those worries began to abate for jewelers, who started reaping the benefits of unspent travel and entertainment dollars, as well as people’s shifting priorities and willingness to seal meaningful relationships with a meaningful token. As summer progressed into fall, the dust of the initial economic plunge began to settle and a clearer picture emerged. A lot of people are hurting and hurting badly—which cannot be dismissed—but a lot of people didn’t lose their jobs and in fact are flush with cash.
- The results of a popular industry survey of fine jewelers, The Centurion Holiday Sales Success Index, revealed the following:
- In 2019, a record-smashing 80% of jewelers reported their total holiday sales rose year-on-year.
- In 2020, more than three-fourths (76%) reported total season increases over 2019; negligibly fewer than last year.
- It’s on par with 2013, another blockbuster year when 77% of respondents to the Sales Success Index survey that year said their holiday season sales were up over the prior year.
- But what sets 2020 apart isn’t the total number of jewelers who grew their holiday sales—it’s the number of jewelers that grew holiday sales by a substantial amount, at least 10% higher than the year before. The Centurion Newsletter
Gold jewelry sales:
- Gold jewelry demand in the US declined by 10% vs. 2019. The decline was, unsurprisingly, driven by damage to income and sentiment from COVID-19. Fourth quarter demand of 48.7t was relatively robust, down just 1% YOY due to the release of some pent-up demand from earlier quarters and spending being diverted from travel and dining out. However, the quarterly uplift from Q3 (+73%) was in line with average Q3-Q4 growth over the previous five years, so does not represent an unusually strong recovery.
- A review of jewelry in value terms reveals a more positive picture for the US in Q4, with high gold prices helping demand jump to a quarterly record of $2.9bn. World Gold Council
Platinum jewelry sales
- Platinum jewelry sales in the US finished the year very strongly in Q4, after reporting significant losses in Q2.
- Many designers and manufacturers reported overall positive sales results for the year, and some reported the best year ever in the company’s history.
- Many retailers also had positive year-end results, as they were able to sell aged inventory from their showcases as they weren’t purchasing new inventory in the same cycles.
- Platinum helped to lead these strong sales in bridal and diamond fashion jewelry for gifting and self-purchase.
PGI USA Initiatives/Activities:
Platinum Business Development Grant
- For the first time, PGI USA announced the creation of the Platinum Business Development Fund – a grant program designed to identify business development partner(s) (manufacturers or retailers) who will commit to making platinum a strategic focus of their business.
- Applications will be reviewed and strategic partners will be announced during Q2.
Platinum Design Collaboration with Pratt Institute
- PGI USA collaborated with Pratt Institute, a private university headquartered in Brooklyn NY, and specializing in academic programs in architecture, art and design, to make platinum jewelry design and manufacturing part of the academic curriculum.
- In addition to providing metal to the students to work with, a platinum jewelry design competition was launched that all senior-level Pratt Jewelry students participated in.
- A panel of judges including jewelry industry leaders in platinum design, manufacturing, retailing and editorial communications reviewed the platinum designs
- 29 platinum designs were submitted for judging by 14 student participants – all women of diverse backgrounds.
- 3 winners were selected and announced during a virtual event on January 27th
- The winning students are working with a NY manufacturer to produce their design in platinum, with some pieces already garnering commercial interest from the industry
- All design entries, a gallery of the judges and the winning designs are featured in an online exhibit that can be viewed at www.pgi.critiart.com
Key observations and insights:
- There is a very strongly recurring theme throughout the luxury and jewelry category –conscientious, not conspicuous consumption. We can see evidence of a significant shift, not only in consumer behavior, but in each category’s response to this shift. It’s long overdue and it presents a big opportunity for platinum jewelry growth.
- We’ve learned that younger consumers define luxury in a way that’s very different from previous generations and it’s forcing established luxury brands to make changes that will benefit them in the long run. Post-pandemic, consumers are re-evaluating what they consider luxury and the result is what we’ve always known all along. They want their luxury products to be rare items of premium quality and lasting value.
Platinum outlook for US for 2021
Platinum jewelry sales in Q1 2021 remain strong and with the continued favorable delta between platinum and gold, interest in platinum jewelry continues to build. For 2021, PGI USA will introduce new initiatives that are focused on:
- Increasing platinum jewelry business across multiple categories and distribution channels
- Inspiring innovative new design
- Educating a new generation of platinumsmiths in the USA
COVID will continue to challenge this market and our economy has not yet fully recovered, but with a new presidential administration, multiple vaccines ramping up distribution and lots of American consumers with cash to spend and pent-up demand to spend it – our outlook for 2021 is very positive