Weekend news in retail and jewelry

The FTC has issued more guidelines to jewelers who are advertising lab diamonds.

“Describing simulated or laboratory-created diamonds merely as diamonds, without more, would likely convey the false impression to consumers that they’re buying mined diamonds. Using a brand name that includes the word diamond, without qualifying your claim with a clear explanation, would present the same problem.” Consumers simply want to know what they are buying, nothing wrong with that.

– If you use terms that aren’t on the FTC’s recommended list, “exercise care to ensure that consumers understand them.” Terms the FTC recommends are: laboratory-grown, laboratory-created, [manufacturer name]-created for lab-grown diamonds, and imitation or simulated for simulants.

– “What matters is that consumers see the disclosure [of the stone’s origin], read it, and understand what it means. That’s why advertisers should make those disclosures clearly and conspicuously, and in close proximity to where the ad uses the term diamond to describe the jewelry…. Putting it at the end of a lengthy block of text or on a different webpage—for example, on an FAQ or ‘diamond education’ page–won’t suffice.”

– “Exercise care when using hashtags to disclose information that is necessary to avoid deception.… For example, a list of hashtags including both #diamonds and #labgrown might confuse consumers about whether the product contains mined diamonds.”

– Advertisers “must have a reasonable basis for any environmental benefit claims they make for their products” and “must qualify their claims adequately to avoid deception,” the post said. It refers marketers to its Green Guides for more information. It is suggested that these guidelines be followed to ensure no visit or sanctions from the FTC. Sanctions could come in a variety of ways. A financial sanction is also possible. FTC is there to protect the consumer and they take their job seriously.

Trade Tariffs

Among the list of goods impacted, which is heavy on food stuffs and raw materials for manufacturers, are electronics (vacuums, televisions), machinery (washing machines, air conditioners), clocks and watches, furniture and bedding, glassware and ceramics, precious jewelry and headgear.

So far, the $325 billion finished apparel, fashion accessories and footwear categories are not impacted, but the raw materials to manufacture those goods are, including fabrics, buttons and leather.

Just how great an impact the tariffs will have on U.S. consumers, and the prices they will have to pay, remains an open question. EconPol Europe, in a policy brief, analyzed the impacts of a 25% tariff and found the prices of affected Chinese goods will rise by about 4.5%. This is not unlivable but still is increase families do not need.

That is a modest increase that many Americans with the exception of those at the lowest rungs of the economic ladder can absorb. “This will lead to a stronger decline in real income for U.S. low-income households,” the report states, and all this does is create a hardship for the lower income households.

Bankruptcies

2017 was a record year for retail bankruptcies and the years following have been no kinder to stores holding a large debt. 10 large retailers have liquidated and filed for Chapter 11, this is 2 more than all of 2018. Gymboree and Payless shoe stores are liquidating and have filed Chapter 11. Those retailers on the high debt list are Neiman Marcus, JCrew, Francesca’s, JC Penney, Pier 1, Ascena Retail Group, Destination Maternity, Stein Mart, and Camping World Holdings, and there are others.


In a recent report, Moody’s analysts suggested the current 

“shake out” of weaker retailers could result in a healthier industry overall. The analysts also predicted that larger, diverse retailers with cash to burn and healthy balance sheets will keep making life harder for the struggling. They do that by competing on price and making investments into e-commerce that are harder for indebted or financially poorer retailers to follow. Along with competition and debt, operational flubs and fashion misses have also plagued weaker retailers. Survival of the fittest is an understatement.

Content JCK magazine