DUE TO LOCKDOWNS and other disruptions caused by COVID-19 this year, jewelers are sitting on historically high levels of ageing inventory with 33% of store owners reporting that half the goods sitting in their vaults is more than one year old, according to the 2020 INSTORE Big Survey.
In normal years, the proportion of jewelers with such a high level of old inventory is usually around half that at about 17-18 percent.
Such inventory woes aren’t unique to the jewelry sector. Big box retailers, for example, are currently estimated to be sitting on a glut of $230 billion in apparel and footwear. But the situation suggests the use of discounting will be intense this holiday period as all retailers fight for a share of consumer dollars as they try to also clear ageing inventory.
Waiting it out and sitting on your goods is not really an option either, says industry consultant David Geller, who likens aging inventory to people slowly gaining weight. “(Such jewelers) think ‘I’m OK,’ but being overweight hurts all aspects of one’s health.
“Too much year-old inventory causes debt, and jewelers focus on the problems it brings rather than being proactive about it,” he says. The SBA loans gave jewelers a lifeline, but those bloated inventory levels will need to be addressed soon, he warns.
Question: Given the disruption of the last six months, what percentage of your inventory is now over one year old?
| Less than 10% |
|
5%
|
| 10 to 20% |
|
8%
|
| 21 to 30% |
|
18%
|
| 31 to 40% |
|
22%
|
| 41 to 50% |
|
14%
|
| More than 50% |
|
33%
|
