Gold’s massive mid-month price plunge may have ended a 12-year bull market in the precious metal, but at least one local company aims to benefit.
Seattle-based Blue Nile, which touts itself as the world’s largest online seller of diamond engagement rings, said Thursday it’s passing the price cuts on to consumers to win more business.
Chief Executive Harvey Kanter said in a phone interview that Blue Nile began lowering prices on gold jewelry by about 10 percent Tuesday. He declined to discuss the effect on sales, noting that Blue Nile is in the “quiet period” before its scheduled May 2 earnings release.
“The reality is we’re going to do more business,” Kanter said. “Our prices already are 20 to 40 percent below traditional brick-and-mortar jewelry stores. This will extend the discount even more, specifically on gold jewelry.”
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Monday capped the biggest two-day plunge in the price of gold in 30 years. By the close of trading Monday, the price was down more than 13 percent, or more than $200 an ounce, from the previous Thursday’s close of $1,564.90. A range of factors, including a gold sell-off by Cyprus, faltering Chinese growth and lower U.S. inflation, were blamed for the crash.
Kanter explained that Blue Nile’s lean approach to inventory enables it to pass on the lower prices without eroding its profit margins. He said Blue Nile typically turns its non-engagement product multiple times a year, while a traditional jeweler might take 12 months or more to sell a particular item.
Blue Nile, which posted sales of $400 million last year, up 15 percent from 2011, has made expanding its nonbridal business a top priority to attract a larger customer base. To succeed, it needs not only lower commodity prices, but also a recovering U.S. economy.
“The consumer seems pretty comfortable buying,” Kanter said. “We had a 30 percent growth rate in our diamond-engagement category in the fourth quarter, so we feel really good about the consumer’s psyche right now.”
— Amy Martinez, firstname.lastname@example.org
Many not ready for retirement
A new survey by AARP reveals that most Washington baby boomers haven’t saved enough for retirement and are anxious about their future.
“Most boomers in Washington told us 65 is their target age for retirement,” said AARP State Director Doug Shadel. “But when they start doing the cold hard math, it becomes clear many of them are going to miss the mark.”
The survey of people between 46-64 found more than half graded themselves a “C” for how well they’d prepared for retirement. And more than half are feeling anxiety about it (see chart).
While most boomers say they’ve tried to cut spending, they simply don’t have enough money coming in; 80 percent of those surveyed said they hadn’t saved enough for retirement because of a “lack of extra money.”
Other reasons boomers haven’t saved enough include: the recession/job insecurity; focus on short term; lack of discipline; and medical costs.
Overspending also threw a wrench into their retirement plans, reported 29 percent.
Some other findings of the survey:
• While 56 percent of respondents are “very” or “somewhat” anxious when thinking about their finances in the future, women are more anxious (64%) than men (48%).
• A quarter of respondents (24%) or approximately 462,000 Washingtonians between 45-64, have less than $25,000 in savings.
The AARP is sponsoring seminars on how to better prepare for retirement. Upcoming sessions are May 15 in Port Angeles, June 19 in Spokane and June 28 in Auburn.
— Gene Balk, email@example.com