Looking at jewelry sales data from the world’s leading luxury company, LVMH Moet Hennessy Louis Vuitton, it’s clear that global jewelry sales are off to a strong start in 2020. Luxury jewelry and watch sales at LVMH increased by 7% in 2019, helping the yearly revenue from their watches and jewelry segment reach a new peak at $4.41 EUR 4.41 billion ($4.85 billion).
Luxury jewelry and watch sales at LVMH were bolstered by notable successes at Bulgari, Chaumet, and Hublot. For example, both the Fiorever jewelry collection and the Serpenti Seduttori watch line were hugely successful for Bulgari. Yet, while the increase in watch and jewelry sales at LVMH was aided by their unique successes, it is also indicative of consumer interest in luxury jewelry and watches as a whole. Looking at various data points from LVMH and other leaders within the industry, one can see that consumer interest in luxury watches and fine jewelry is up across the board.
Luxury Watches preform well in 2019 fiscal year.In-store jewelry sales and watch sales gained 3 percent at LVMH, with a profit of 5 percent. Furthermore, in the fourth quarter, profits from jewelry sales saw a 4 percent gain, some EUR 1.14 billion ($1.26 billion US). These sales figures exclude revenue from Tiffany & Co, which LVMH agreed to acquire in November 2019. The transaction is expected to finish come 2020.
Jewelry sales and watch sales did well for LVMH. Here in the United States, the revenue of LVMH’s watch and jewelry division for 2019 was estimated to be EUR 736 million ($809.9 million). While their jewelry sales and watches did well globally, analysts worry over fears of social unrest. The social climate in Hong Kong is of particular concern among many analysts, as Asia is LVMH’s largest market.
Global jewelry sales have remained steady, despite concerns about key markets like Hong Kong. Commenting on the effects of the uncertainty in Asia, the consultancy group Cowen has stated, “the overall environment was more challenging for watches and jewelry, given the group’s high sales exposure to Hong Kong.” Furthermore, they said, “we do expect watches and jewelry could remain pressured due to Hong Kong.”
Though financial experts remain watchful of how the ongoing disruption in Asia could impact luxury sales worldwide, so far large luxury retailers have seen minimal impact. For example, the LVMH group still experienced good growth in Asia, helping it achieve strong overall gains. The LVMH’s group revenue for 2019 increased some 15 percent to a record EUR 53.67 billion or $59.06 billion US. Additionally, its sales of jewelry continue to reach double-digit increases. Net profit grew 15% to EUR 11.5 billion or $12.66 billion US.
Data has shown that consumers are trending toward more expensive fine jewelry and luxury watches, while they are shying away from fashion jewelry and less expensive timepieces. This is the continuation of an ongoing consumer trend in the jewelry and watch market.
In the Watches of Switzerland Group’s Annual Report 2019, you can see a strong growth in consumer preference for more expensive luxury watches. Per their report, timepieces priced above GBP 10,000 or $13,073 US accounted for 37 percent of the sales in the men’s market in 2019, compared to 34 percent in 2014. The items that cost between GBP 5,000 or $6,542 and GBP 10,000 increase to 36 percent from 33 percent. At the same time, the same price category has jumped even further for women’s watches, growing 7 percent from 2014. Simultaneously, less expensive timepieces under GBP 5,000 have seen a decrease in sales.
The dominant metal trend in luxury watches is steel. This is something any jeweler who carries luxury watches can confirm, and also something that’s quite clear in sales data. For example, 42 percent of the men’s watches sold by LVMH were made primarily of steel materials. Other watch trends found within LVMH’s sales data include a 20 percent increase in the popularity of steel and gold watches for men, an overall increase of 39 percent in women’s watch sales, and a marked decrease in the sales of timepieces made from leather or precious metals. .
Black and dark blue color watches accounted for 61 percent of men’s sales in 2019, with black edging out dark blue for the most popular color. On the other hand, women’s color trends are moving away from these types of traditional colors. In women’s watches, sales of watches in classic colors experienced a noticeable drop. In their place, new funky colors like pink, champagne, blue, and brown rose in popularity, experiencing a 31 percent rise in 2019.
The Watches of Switzerland Group noted in its yearly report that women’s watch sales experienced a significant rise, while also pointing out that women are buying men’s watches. Their report noted that women were interested in large watches, and that the “gender classifications of watches is increasingly less relevant today.” Another consumer trend within women’s watches is the ongoing popularity of diamond dial markings. Most women still prefer diamond-set dial markings, so Roman, Arabic, and baton styles continue to remain less popular within women’s models.
With such ongoing success in the women’s market and the luxury watch market as a whole, Watches of Switzerland has announced plans for expansion. The company entered the US market with its purchase of the luxury jeweler Mayor’s Jewelers in 2014, and has mentioned that they have plans for a large expansion into the luxury jewelry sector. Watches of Switzerland has stated that they will be opening up to 7 new locations in the USA this year.
With the impact of the ongoing novel coronavirus pandemic, 2020 has been a year unlike any other. The jewelry market and jewelry retailers have certainly felt the impact of the pandemic. Yet, as we move past Black Friday and into the thick of the holiday shopping season, it appears that COVID-19’s impact on the luxury watch and jewelry market has not been quite as negative as analysts feared earlier in the year.
The coronavirus pandemic has not stopped people from buying jewelry entirely, but it has changed how they buy it. City lockdown measures, along with general health concerns regarding shopping in brick-and-mortar stores, have led to a significant spike in interest for online jewelry businesses. And while online jewelry store sales were shaky near the start of the pandemic, these online sales have generally become stronger and more steady throughout the year.
It’s important to note, though, that while online sales have started to become more reliable, the year as a whole has been one of ups and downs. For example, many consumers paused on making fine jewelry purchases in the spring, during which US specialty jewelry retailers saw an 82 percent sales drop in a two month period. However, sales bounced back up in May, rising 230 percent. Seasonal ups and downs are normal in the jewelry market, but the ones we’ve experienced during the pandemic seem to have been more drastic than usual. It remains to be seen how these more dramatic drops and rises will shake out in terms of overall jewelry sales revenue for 2020.
According to JCK’s 2020 State of the Jewelry Industry Report: COVID-19 Business Impact, however, the majority of jewelers are optimistic about the future of jewelry sales and the jewelry market in general. The JCK Jewelry Industry Confidence Index is at 66 percent. This report also revealed some interesting findings about increased jewelry sales. Per the report, some sales categories have actually experienced sales increases. Custom jewelry sales are up by 38 percent, while both bridal jewelry sales and colored gemstone sales are up by 23 percent.
Luxury watch sales have also been impacted by the coronavirus pandemic, but in a rather unexpected way. While sales of less expensive watches are down, the sales of high end watches are up dramatically. According to Reginald Brack, a watch industry analyst from The NPD Group, “the luxury segment is doing extremely well at 3,000 plus, and it’s actually had twice as fast of a recovery as the remaining market.” Analysts like Brack have tied this sales boost to savvy social media use on the part of watch retailers and watch brands, alongside increased interest among collectors and high income consumers who haven’t spent money on vacations this year.
The watch and jewelry industry has certainly been impacted by COVID-19. Yet, exactly how this impact will translate in terms of overall global jewelry sales is currently unknown. We will have to wait for the sales data that will be released in 2021 to get a full picture of how the coronavirus pandemic affected jewelry sales in 2020.
Jewelry Sales and Luxury watches are selling well.
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