Signet Sees “Steep Decline” In Sales Of Jewelry Priced Under $500

The market for jewelry priced under $500 is cooling off quickly, signaling that lower- and mid-income earners are starting to feel the crunch of the inflationary recession we are in the early innings of.

The revelation came to light last week after Signet, who owns Kay Jewelers and Zales, reported a “steep decline” in demand for such items during their earnings report. As Bloomberg noted last week, higher rent prices and gas prices have put the lower and middle class in a crunch, with far less to spend on discretionary items like jewelry. 

Gina Drosos, chief executive officer of Signet Jewelers, said that spending was robust last year due to stimulus checks and pent-up pandemic savings. Now, the lower class is “much more economically challenged and not spending as much,” she commented. 

She said that consumers were also taking some of their discretionary spending cash and using it at apparel and electronics chains, who are offering steep discounts to try and offload excess inventory, instead. 

Inventory gluts occurred in many retail industries after stores stocked up due to high demand and supply chain worries. Now, they’re stuck holding all of the excess product. Signet says it doesn’t have any inventory issues and that their “levels of clearance are down,” meaning the company isn’t discounting at the rate that many other retailers are. 

But while “higher-price-point items are showing more strength,” Drosos said, sales of items under $1,000 and $500 price points have fallen. 

Despite the higher end consumer coming through for Signet, which was able to post an impressive quarter, the company said it saw a 35% increase in customers who were using a “buy now, pay later” option.