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January Jewelry Sales Down 5%, Loose LG Revenue Marks First Fall

February 13, 2024 /

After a short retrieve during the holiday season, overall US fine jewelry and diamond retail sales are declining again. In January, revenue was down 4.9% year over year. The decline in loose diamond sales, which accounts for more than 21% of retailers’ jewelry sales, was the main cause of the decline.

This is a disappointing beginning to the year after the expectation for a modest return to recovery provided by the better-than-expected holiday results.

Low- and High-Priced Jewelry Drag Down Finished Jewelry Sales in January

The high-level numbers for fine jewelry sales in January were poor. Unit sales were down 5.1% and retail value was down 3.3%. However, it was the retail price points at the extremes of the market that caused the overall market to decline.

The low end was weak. Unit sales for items with a retail price under $1,000 were down 7.1% and retail value decreased 6.3%. The top end was weaker. Unit sales for items with a retail price of more than $100,000 were down 40% and retail value was down 42.8%. These two price ranges represent 66.7% and 20.8% of total retail sales value.

The rest of the market had a more stable start to the year. For all items with a retail price between $1,000 and $100,000, unit sales were down 0.8% and retail sales value up 1.3%. Higher end consumers were highly active with sales between $5,000 and $100,000 up 2.6% in units and 4.4% in value.

Jewelry unit sales market performance of jewelry priced under $1000 - February 2023 - January 2024 - Analysis Tenoris.bi

Natural Diamond Jewelry Sales Up 3% in January

Finished jewelry set with natural diamonds continued to show relative strength with the third month in a row of year-over-year gains with retail sales value up 3.1%, although unit sales were up just 0.1%. The average retail price for a piece of natural diamond jewelry was up 2.7% while retailer margin was down 1.8%. Sales improvements continued in bracelets, pendants and necklaces. Bridal jewelry had a mixed impact on overall sales with units down 9.5% but retail sales value up 1.1%. This was driven by a sharp 14.9% increase in the average retail price per bridal item.

LGD Jewelry Offering Showing Signs of Expanding to New Categories

Year over year, unit sales of LGD-set finished jewelry were up 44% with retail sales value rising 27.8%. An interesting item to keep an eye on, LGD semi-mounts represented 7.1% of all diamond semi-mounts. This is up from a 1.8% share in January of 2023 and reflects 271% in unit sales.

One possible explanation for this is the rise in LGD-set engagement rings, which represented had a 22.1% share of diamond engagement rings, up from 16.5% in January 2023. When considering the full range of these rings – including finished diamond engagement rings, semi-mounts, and loose diamonds set by retailers in store – the share of LGD is even greater: 40.7% last January compared to 32.4% in January 2023.

Tenoris has reported on the increase of LGD outside of the single stone market and this is another indication of full lines of LGD jewelry sold by retailers. This is off a small unit base, so the numbers look gaudy, but it bears continued observation.

Additional Observations On January Jewelry Sales

American consumers are saying square(ish) is in. Among finished jewelry, the three fastest growing natural diamond shapes in the market are emerald, cushion and radiant. While total units are low, each shape posted growth rates of more than 20% year over year.

Pearls appear out of fashion with American consumers. The holiday season saw overall pearl jewelry sales down 7.1% in units and 15.4% in value. However, pearl stud earrings continue to be a standard with January sales up 4.8% in units and 5.4% in value.

Some may find themselves surprised that the fastest growing size of LGD stud earrings is in the 6.00 to 6.99 total carat weight range.

US Jewelry Sales chart - January 2020-January 2024 with trend line - Source Tenoris

Total Diamond Sales Keep Deteriorating

Despite the ongoing rise in the number of loose diamonds sold, revenue generated from these sales continued declining. The key reason for this trend is that prices of lab-grown diamonds keep falling despite the continued demand growth.

Compared to January 2023, loose diamond sales declined 7.8% while the number of diamonds sold increased 6.4%.

Consumers Pay More for Their Natural Diamonds in January

For a second month in a row, the average expenditure per loose natural diamond rose year over year. While in December it can be explained by bridal-driven demand, In January this is primarily due to continued desire for larger diamonds.

Although the average spending per item rose 1.8%, total loose natural diamond sales declined 9% year over year. This is part of the relentless decline in US natural diamond sales that began in May 2022.

This was to be expected in the year following the extraordinary surge in demand the diamond market ever experienced. However, this decline is not stopping and that is a worrying issue that the industry must address.

For the First Time, Jewelers Revenue from Loose LGD Declined

For the first time since we began collecting sales from retailers more than four years ago, the total value of monthly lab-grown diamond sales declined year over year. The decline, down 3.3% compared to January 2023, is the next stage of a long trend of reduced revenue from loose LGD sales.

Last December, sales growth was just 1%. This compared to a 57% rise in January 2023.

This speaks volumes to consumers’ interest in LGD. While they are purchasing more units, indicating wider acceptance, their willingness to spend more is possibly hitting a ceiling.

In the past year, the average expenditure per loose LGD decreased to $3,118 from $4,089, a steep 24% drop in a single year. The rise in number of units sold is not making up for the drop in price. Even the consumer movement to larger stones does not help.

As stated last month, this trend should worry the LG market.

Alongside the decline in revenue, retailers keep protecting their revenue by increasing their gross margins. In January, it already reached 67%, up 23% year over year. Retailers no longer double their cost to set price, they are already tripling their cost.

One could just wonder how consumers will feel about it if they all knew that the low price they believe they’re getting is still relatively steep.

US retail loose lab grown diamond sales year over year chart - Jan 2022-Jan 2024 - Source Tenoris January jewelry sales

Loose lab-grown diamond sales are predominantly VS1 clarity and EFG colors. Demand for rounds keeps declining. Rounds are presently just 42% of sales, while ovals are 27% of demand.

Feature Photo: Debby Hudson

About Tenoris

Tenoris collects retail sales data from a broad representative sample of US jewelry retailers. It covers more than 6% of the market by value. Tenoris subscribers include retailers, manufacturers, miners, and financial firms. They use this data to study everything from broad market trends to price prediction, assisting them in identifying changing trends and opportunities ahead of their competitors.

Tenoris can help improve your business through a better understanding of the US jewelry market. Contact Us to discover how our reports and tools provide comprehensive insights of the US jewelry market.

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