High Jewelry Brands are Still in Deep Financial Sh*t

By Lauren Sherman over @ fashionista

While fashion and luxury leather goods companies seem to be bouncing back nicely post-recession, jewelery and watch brands are still struggling. In 2009, Bulgari says it lost $65.4 million. (In 2008, it made $121 million.) And watchmaker Movado said that it expects to lose about $24 million this quarter alone.

What gives? Why are shoppers more comfortable spending $5,000 on a handbag than a tennis bracelet?

It seems that, during this particular downturn, people were more willing to “trade down” when it came to jewelry. Diamonds and silver became a popular combination for pieces like engagement rings. In the past, the pairing was a rare occurrence. What’s more, leather goods–particular those from high-end labels like Hermes and Louis Vuitton–have a much higher markup percentage-wise than jewelry. Most savvy shoppers know that if you like a pair of diamond earrings at Tiffany, you can probably find the same ones through a diamond dealer for half the price. There are easy ways to cut the retailer out of the equation with fine jewelry. Not so with leather goods.