The rich have bought more jewelry during the covid-19 pandemic

Tanya Moss, jewelry inspired by textiles from Oaxaca 2:18

New York (CNN) -

This is the latest sign of economic divide between the haves and the have-nots in the pandemic: The wealthy are buying more high-end jewelry, such as diamond rings and gold necklaces.

According to Edahn Golan, founder of Edahn Golan Diamond Research & Data, purchases of fine jewelry in the United States recovered compared to the first months of the pandemic and began to gain momentum in the summer.

Fine jewelry sales rose almost 10% to $ 5.25 billion in August compared to the same month in 2019, according to the latest available data.

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Signet Jewelers, which owns and operates retailers Kay Jewelers and Zales, said the company's preliminary August sales for all jewelry were up 10.9% compared to the prior year.

Meanwhile, Tiffany, a chain that was hit hard by the drop in tourist visits to stores, said last week that sales in the United States in August and September fell by a low double-digit percentage, an improvement from may.

The De Beers Forevermark jewelry brand has seen double-digit annual growth every month since July.

The company, which is currently embroiled in a high-profile court battle with French luxury brand conglomerate LVMH over a merger deal, also highlighted the strong performance of its T1 line, its new collection of gold and diamond gold jewelry. .

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The improvement in fortunes for the jewelry industry comes as the US economic recovery loses steam after a rapid rebound seen in the summer.

Some economists have argued that the economic recovery appears to be K-shaped, with the wealthiest Americans recovering rapidly, while lower and middle-income households are not.

Daniel Bachman, Deloitte's US economic forecaster, said the pandemic has hit the job market unevenly.

"The bottom end was hit hard and frankly they are not buying jewelry," he said.

"The high end is based on unused income and the savings rate is very high right now."

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The rich buy diamonds instead of traveling

Jewelry sellers have a theory as to why they are experiencing a comeback in sales.

"In every market in the world, the number one competition for our industry is travel," said Stephen Lussier, executive vice president of De Beers, the world's largest diamond mining company.

"If you have a wedding, a 10 or 25 year wedding anniversary, an important birthday, the most romantic thing to do is travel."

But now, with travel on hiatus, diamond jewelry has been capturing some of the unspent travel budget, he said.

De Beers' Forevermark diamond jewelry brand.

In the United States, De Beers' diamond jewelry brand, Forevermark, has seen double-digit growth year-over-year every month since July, he said.

Macy's CEO Jeffrey Gennette highlighted a similar sentiment at a Goldman Sachs retail conference in September, noting how luxury goods sales were "exceeding expectations."

There are many theories for that.

I think one of them is that you have clients who don't travel.

Therefore, those budgets that used to be spent on experiences are now going to be indulged in these products, "he said.

In an email to CNN Business, Macy's said it has seen customers during the pandemic "gravitate toward the jewelry category, in part because it retains its value."

Jewelry stores are slowly recovering

Signet Jewelers is seeing that trend with engagement rings.

Because couples are not committed to destiny, "they are investing in an even more fabulous [diamond] ring," said Jamie Singleton, president of jewelry retailers Kay Jewelers and Zales.

A smaller vendor says things are looking up after it was hit hard earlier this year.

As with most retailers, the COVID-19 lockdowns forced Van Cott Jewelers, a 100-year-old company in Vestal, New York, to close its doors in mid-March.

Van Cott Jewelers in Vestal, New York.

The business reopened on June 8.

Since then, owner Birdie Levine, a certified gemologist appraiser, has noticed some trends in buying diamond jewelry.

"Due to covid-19, we were closed for almost three months and then we were only allowed to offer closed-door sales," Levine said.

“These conditions definitely had an adverse effect.

It wasn't until July that we witnessed a rebound in high-end diamond sales.

We've been selling a lot of $ 20,000, $ 30,000, $ 40,000 diamond jewelry pieces, ”he said.

Levine said her clients are enhancing diamonds on existing jewelry they own, such as an engagement or wedding ring, or buying an entirely new piece.

As a result, it said its average sale since the reopening has been "much higher," although its total sales have not reached the level of a year ago.

Still, Levine hopes that diamond jewelry will be a top seller by the end of the year festivities.

"I'm getting ready to buy a lot of loose diamonds to get ready," he said.