Tom Whitehurst

Sunday, December 24, 2000

The progressively bleak economic news apparently hasn't put a dent in local holiday sales of fine jewelry and luxury cars.
   Fine diamonds, top brand watches and pearls are moving briskly at Susann's Custom Jewelers. And at least four people are in for a big Christmas surprise - a new Mercedes. Those aren't nearly all the Mercedes sold at Ed Hicks Imports in December, general manager Charlie Hicks said.
   "These are the ones that you go to the extent that they're going to hide them in the garage."
   It's hard to say whether local sales of Rolex watches and Mercedes cars is a reliable economic indicator. But it's fair to say that those purchases are not the desperate acts of people who lack confidence in their economic future.
   Rich getting poorer?
   Still, the way the stock market has been going, for once it seems possible that the rich are getting poorer, or maybe just not as richer, as fast.
   So why is Denny Bales, owner of Susann's, looking at a record year of sales? He says his December sales will be at least equal to last year, which is good because last year was a big December for him. And his November sales beat last November by 32 percent. "And you know the economy was just as stinky in November," he adds.
   And why is Hicks seeing more serious Mercedes buyers than usual?
   Interestingly, both say their customers aren't all wealthy.
   Middle class customers
   "When we sell a Rolex watch, we don't always sell them to upper-income people," Bales said. "Fifty percent of our Rolexes are sold to people who always had a dream of owning a Rolex.
   "Same with large diamonds. Many of the larger sales that we make are to people with very average, normal incomes. They're not people with excessive incomes who can come in and buy anything they want."
   Rolexes, incidentally, start at $2,500. A bottom-of-the-line Mercedes - and yes, there is such a thing - starts at $29,000. There are pickup trucks that cost more.
   Hicks describes many of his Mercedes customers as "middle class or two-income families who are justifying their hard work."
   Traffic counts
   Both Bales and Hicks noted some interesting differences in this December's performance.
   Last year, Bales heavily promoted a $59 gold rose and a $19.95 guardian angel pendant - lower-priced items calculated to generate volume. This year, he didn't.
   "So we are not seeing that tremendous traffic that that advertising generated. But even without that revenue, our numbers are practically identical to last year. Typically speaking, you would think the traffic-type items like the rose and pendant would be the thing to do this year, but we did the opposite, and the result is just the same."
   At Ed Hicks Imports, the number of lookers is down a bit, but sales are not, Charlie Hicks said.
   "We track two things, and that's traffic - people coming through the door - and people coming through the door buying. Traffic may be off less than 10 percent, but we're actually seeing more buyers within that count. We're not seeing as many people dabbling with the idea of buying a car. We're seeing people coming to buy a car.
   Staying ahead
   "I don't know what that signals. I think people right now are cautiously optimistic or cautiously pessimistic."
   Hicks suspects that many of his customers have been invested in the stock market long enough that their recent losses still leave them well ahead of where they started. A Mercedes is a tangible asset that represents the fruits of their earnings. And while cars do depreciate, he said, a Mercedes won't depreciate nearly as fast as the market in recent months.
   Behind the trend
   Hicks agrees that right now, it's nice to be behind the times in Corpus Christi. Until recently, we've suffered a collective embarrassment not to have been taking part in the national economic boom. But our November unemployment was 5.8 percent, down from 6.5 percent a year ago. Nationally, it's going the other way.
   "Sometimes it's nice to be in a town like Corpus Christi where the trend doesn't hit here first. The way our economy tends to run, we don't' see the highest part of the peak but we don't see the lowest part of the valley."
   May your Christmas hit its peak in your garage.
  
  

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