Two important hopes for a jewellery industry boom 2015

Two stories broke this week that give plenty of reason to believe that the UK jewellery industry can enjoy an upward trajectory in the year ahead.

First, Signet announced that it’s UK division enjoyed sales growth of 9.7% in the Christmas trading period, compared with the same period last year. Everyone expects a bounce in the Christmas period compared with the preceding 12 months. But rarely do consumers better their spending habits year-on-year in one month and then curl up into a ball in January. Near-10% growth is significant by anyone’s standards, and I would be surprised if this is not indicative of more permanent enthusiasm in consumer market.

Second, the price of polished diamonds fell over the course of 2014. Whilst dropping prices tend to mean harder times for producers, the knock-on effect is cheaper overall costs for the production of finished pieces.

Rapaport said that reduced bank credit, tight profit margins due to high rough prices, and grading delays at the Gemmological Institute of America (GIA) all contributed to squeeze cash flow among manufacturers, and also pointed out that banks reduced their credit to the industry and are demanding more stringent reporting and business practices from the trade.

Really the only scenario in which this should be a worry for the high street jeweller is if actual sales were falling, but, as can see in the case of Signet, this is unlikely to be the case. Rapaport specifically raised the point that inventory levels remain high and explained the drop in prices by hypothesising that polished suppliers are simply ‘shifting stock’ at lower rates to improve their own cashflows.

So, onwards and upwards. Hallmarking rose every month last year and retail is in a better state than it has been in years. Hopefully this is the start of a very happy new year indeed.