Could the big diamond solitaire engagement ring soon be a relic of the past?
Fall typically is the busiest time of year for sales of engagement rings – an estimated 28% of all engagements happen around the holidays in November and December, according to Fairchild Bridal Group. And this year, some jewelers say they’re noticing consumers cutting back on those purchases.
At Sterling Jewelers, Inc., which operates more than 1,400 Kay Jewelers, Jared The Galleria of Jewelry and other specialty stores in the U.S., some shoppers have been purchasing rings with a few small diamonds, which cost less, instead of the traditional showstopping solitaire in order to pop the question. While a 1-carat solitaire engagement ring could retail for about $5,000, a ring with a few small stones generally retails for less than $2,000, says David Bouffard, spokesman for Sterling. E-tailer Whiteflash.com says it has seen a recent uptick in sales of less expensive colored gemstone rings and diamond bands that are being purchased as engagement rings. At Whiteflash, a platinum ring set with a 2-carat equivalent sapphire could retail for $5,300 while a version with a similar-sized diamond could retail for $20,000, for example.
“People are still falling in love and getting engaged but the overall environment is more difficult – we’re seeing people get engaged with these rings and saying, perhaps later they’ll buy the solitaire ring,” says Diane Irvine. The Wedding Report, a wedding-industry market research firm, had forecasted in March that the average price of an engagement ring purchased in the U.S. would drop 6% this year to reach $4,332. After polling retailers and brides in recent months, however, the company now estimates that the average price of an engagement ring will plummet a further 20% to 30% in 2008.
To be sure, companies say conventional diamond engagement rings are still popular even if some consumers are trimming costs by buying smaller stones. But if lovebirds do indeed cut back, the jewelry industry could take a hit. U.S. sales of jewelry have suffered since the financial crisis exploded in September – sales through the year had been on the rise through August but were flat in September, according to industry analyst Ken Gassman, who is with the Jewelry Industry Research Institute. (August, for example, saw a 2.8% increase over the same month a year earlier.) While U.S. jewelry sales figures for October aren’t available yet, Mr. Gassman noted that publicly held jewelers Sterling, Birks & Mayors and Finlay have all reported sales decreases in the third quarter which ended in October.
Based on these September and early October numbers, Mr. Gassman recently revised his U.S. jewelry sales forecast for 2008 and now expects them to decline 0.3%. (He had previously expected U.S. jewelry sales to rise 2% in 2008.)
Jewelers also could take a hit due to the growing number of Americans who are suddenly seeking to sell their rings. IdonowIdont.com, a business that specializes in the resale of engagement and wedding rings, says it saw its sales listings double in October, rising to about 1,000 from 500 in September. The site saw sales rise 61% and Web traffic jump 261% in October, compared with September, said chief operating officer David Becker, who says he attributes the increase to “the three ‘Ds’ – Debt, Divorce and Death.”
Readers, has the recession made you scale back on your purchase of an engagement ring or inspired you to sell your diamond ring?
