the Bus inY our Business?” Smith wrote that the jewelry industry is “overloaded with retailers who live in the middle.” “They are neither clearly defined as quality product/experience/having a clear sense of self, nor competing solely on price.The middle is a dead zone. It is the place that makes the custom- ers work too hard to figure out what your store stands for and it is not a sustainable market posi- tion in the rapidly changing retail landscape.” Smith went on to talk about the need for re- tailers today to increase their average ticket in the face of declining sales traffic, noting that, “Increas- ing your average ticket is best accomplished by having products and brands that are differentiated and elevated beyond the mass of stuff that can historically be found in many retail jewelry stores.” The “mass of stuff” includes those “gener- al sapphire rings” the L2 analyst Sherard was railing against. “In an age of digital where everything has to be unique and exciting … it can be hard to con- vince someone why they should spend [money] on your product rather than the product of a local artisan to whom they’ve formed an emo- tional attachment,” he says. BY THE (STORE) NUMBERS In addition to sales, National Jeweler’s “State of the Majors” issue includes the “Top 50 Specialty Jewelers” list, which ranks chains that sell just jewelry and watches by store count. The retailers on the 2018 Top 50 list have 6,007 locations total, compared with 5,844 on the 2017 list, a 163-store difference. However, this year’s total includes 130-store chain Diamonds International, which errone- ously was left off last year’s list. If you exclude those 130 stores, then the margin narrows to 33. That’s an average of less than one addition- al store for each retailer. The openings that did take place were con- centrated among singular brands—Swarovski, Pandora, the companies under the Richemont umbrella—rather than multi-brand retailers. According to National Jeweler’s analysis of the list, Pandora netted the most store open- ings in 2017. The Danish bead and jewelry brand ended the year with 134 stores, 83 more than it had in 2016. Of those, 58 were concept stores the company bought back from franchisees (50 in the United States and eight in Canada); a Pandora spokesperson declined to disclose the names of the jewelers from which stores were repurchased. Also adding a significant number of stores were Swatch Group (+66), Swarovski (+13) and Richemont (+10). Reid Sherard, associate director of Europe- an research at L2 Inc., says brands and luxury conglomerates like Richemont, Swarovski and, to a lesser extent, Pandora, are growing their vertical retail presences because having their own stores is more advantageous. They control the product, the marketing and the in-store associates who sell their jew- elry and watches. Having stores allows them to form relationships with consumers, building on the bonds formed by e-commerce sales and on platforms like Instagram and Facebook. Brands also make more money operating their own stores, which is a compelling reason to continue to do so, particularly for public companies with shareholders to satiate. “It definitely [displeases] some of [their] longtime [retail] partners,” Sherard says, “but a lot of brands have made the calculation that it is better for them in the long run.” THE STATE OF THE MAJORS THE DIAMOND INDUSTRY JEWELRY DESIGN THE COLORED STONE MARKET