Via Bloomberg – “Diamonds Post-Lehman Have No Aura as Buffett Can’t See Recover“:
Jon Bridge, whose family has sold jewelry in Seattle for 97 years, said he grew so accustomed to rising sales that he faced more crises on the boards of charities. That changed in October, as the co-chief executive officer of Ben Bridge Jeweler choked down dinner in his home office and pored over reports showing a 20 percent decrease in sales, the most he had seen.
“This wasn’t just a bubble, this was a balloon, a hot-air- balloon explosion,” said Bridge, a great-grandson of the founder of the 75-store chain, owned since 2000 by Warren Buffett’sBerkshire Hathaway Inc.
Bridge blamed easy credit and inflated incomes for exacerbating the bust.
“We were living a fairy tale for the last 10 years or so, and you can’t do that,” Bridge said.
The chain has closed three stores in the past year. Buffett’s other jewelry-store company, North Kansas City, Missouri-based Helzberg Diamonds Shops Inc., has shut 19 stores this year, reducing its total to 233.
Buffett, 79, told Bridge employees not to expect a quick recovery. The billionaire investor, who receives a mailed copy of Ben Bridge’s weekly sales, met Bridge and other executives for lunch in May at Chandler’s Crabhouse on Lake Union, north of downtown Seattle.
“We are deeply in this — in a recession — and it’s going to take a long time to get out of it,” Buffett said over his usual meal of steak and a cherry-flavored Coke, according to Bridge. Buffett didn’t respond to e-mailed questions.
When we’ve been living in a fairy tale for the past decade, where consumer spending has been funded entirely by debt, this statement by Jon Bridge is an indication of the serious troubles still ahead of us.
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