With the price of gold hitting record highs – as of this writing it was more than $1,800 an ounce – one might think that this would be a good time to be in the jewelry business. But as I found out recently, for all but one of the Beach’s local jewelers, it has had the complete opposite effect.
“It has all but destroyed the sale of gold jewelry items such as bracelets, chains and earrings,” said Gord Edwards of Edwards & Davies Jewellers (2834 Danforth Ave., 416-698-7880). Cathy Kwok who runs Perfect Jewelry in Shoppers World Danforth, told me, “Business is going down.”
“The jewelry business is in big trouble all over Canada,” admitted Fred Jakob of Form Craft Fine Jewellery (1885 Queen St. E., 416-691-1253). Only brothers Enrique and Sergio Morguet who own and operate Morguet Jewelers (1918 Queen St. E., 416-416-698-8404) said that they see their business actually pick up during recessionary times.
“We’re selling our label,” said Enrique Morguet who with his brother has run Morguet for 27 years. The store does most of its work in sterling silver, but Enrique said that 50% of their custom work incorporates gold, usually gold supplied by the customers in the form of old jewelry.
Edwards also contends that current styles are as much to blame as the skyrocketting price of gold for the downturn in gold jewelry buying. It’s not fashionable to wear layers of gold chains à la Mr. T anymore, he said. People are keeping their adornments more simple; a wedding band, a watch, maybe a fine pendant, but that’s it.
Jakob says it’s the continual pounding of television and radio spots telling people that now is not the time to be spending money that is to blame. He told a story of a woman who had picked out a beautiful necklace in his shop, but her husband vetoed the purchase claiming that he had been told not to spend on luxury items. Morguet agrees when he said that his customers like to be careful what they spend their money on these days.
“Jewelry is for when you’re happy,” said Jakob, recalling a customer who would come in and buy his wife a piece of jewelry just because he had been having a good day, and wanted his wife to share it with him in some way.
“Not many people are buying these days,” said Kwok.
Both Edwards and Jakob were quick to say, however, that it is the bridal business that is keeping jewelers like themselves in business these days.
“The bridal industry is the industry,” Edwards said emphatically. “It’s what’s keeping this industry viable.”
Bridal jewelry consists mostly of diamond rings and their settings. Edwards said that people will often have their diamonds reset when styles change. “It’s made up for everything.”
A recent story in the Moneyville section of the Toronto Star highlighted the risks and benefits of selling your old gold jewelry (As gold soars what’s your jewellery worth, Aug. 23) mentioning high-powered television ads by such personalities as Russell Oliver, and Harold the Jewellery Buyer.
“We don’t buy used jewelry,” said Cathy Kwok. Neither does Fred Jakob. “They bring in everything from home, and 80% of it’s costume jewelry,” he said. Edwards doesn’t either, but did recommend that people interested in selling should go to two or three places, and not take the first offer.
Do any of these local jewelers think that gold has reached its peak?
“I was telling people to sell when it hit $1,100/oz,” said Edwards. “But look what happened.”
Enrique Morguet said that the price of silver, although not as high as gold, has nonetheless increased more in value percentage-wise. “Silver has more than quadrupled in price in the last few years,” he said. “It has gone from $8/oz to $48/oz.”
Does anyone foresee a time in the near future when the price of gold will go down enough to get people back in the stores buying jewelry again?
“As soon as the US gets its financial house in order, and the stock market recovers, we may see the price of gold come down,” said Edwards. “Everything is complicated, there are no simple answers.”
Fred Jakob has a different take on the problem.
“This is a consumer society, “ he says. “If we don’t spend money, the economy stagnates.”
And stagnant the jewelry business in the Beach has become. Said Jakob, “You’re the first person to come through those doors in four days!”