Well the reason is simple, our CANADIAN DOLLAR.
The sell-through of watches and jewellery this year has been lower with the end to a what I call a "Dismall" Christmas from the east to the west coast. You see Canadians which shop for the "brand names" of the world like the Cartier's, Patek's, etc... enjoy shopping around. These types of clients do not only shop while on vacation in Florida or while in the Islands, but they shop while away on business all the way in China. I can't begin to tell you how many phone calls I have gotten these past three months between clients to personal acquaintances asking me what I thought of deal 'XYZ'. My answer is consistent, pay the duty and do it!!! We can't compete anymore, which will probably be a hot topic for another blog posting, therefore the responsibility lies with the various suppliers and manufacturers to react accordingly (i.e.: the big brands).
This brings me to the second root of the problem- Travel. According to the basic laws of opportunity cost, when faced with a decision to either stay and buy, or flee and enjoy, most people are taking the latter half. You see with Baby Boomers getting older they want to enjoy there time and gain from an experience, and when the Canadian dollar is at par the opportunity is more enticing. Even if I took another demographic segment this theory holds constant due to the fact that "PAR" means "EVEN" no matter what your age or language.
In conclusion, with the dollar where it is suppliers of watches and brand name jewellery, after being spoiled for many good years, will finally feel the pinch from authorized dealers this coming year and will succumb to their wants and needs otherwise look for these brands to be on the street. This means leaner inventory, and right-sizing, oh and don't forget the under performing lines which some people are breathing life support into- pull the plug their history. However, the one piece of advice I can give you, is buy lots and lots of diamonds and gold that's something to invest in while the dollar continues to hurt the market, you might not thank me today or tomorrow but talk to me in five or ten years.
