EditorsJun 11, 2025
Q&A: Al Cook on Differentiating Natural Diamonds, Traceability, and TariffsThe De Beers Group CEO discusses the company’s new “beacon” program, the likelihood diamonds will be exempt from tariffs, and “Origin.”
IndependentsMar 31, 2020
On Data: The Questions You Need to Ask About CARES
In another special edition of On Data, Sherry Smith says jewelers need to consult their team of experts about the Coronavirus Aid, Relief and Economic Security Act.
Sherry Smith is director of business development for data and consulting company The Edge Retail Academy. She can be reached at sherry@edgeretailacademy.com.
The first confirmed coronavirus case in the United States was reported on March 5.
Although we are less than 30 days into this pandemic in the U.S., the numbers are staggering—more than 120,000 confirmed cases and over 2,000 deaths as of Monday, the World Health Organization reports.
We now lead the world in total number of cases.
We’ve never been here before, battling a nationwide pandemic and facing so much uncertainty.
We know we will come out of this; we just aren’t sure when or what that might look like, as many of us will be adjusting to a new normal.
In the meantime, though, it is critical—and I know you’ve heard me say this before and I make no apologies for saying it again—but we must focus on what we can control.
So in this column, I’d like to address the multiple stimulus packages and relief programs available to all of us as it relates to our employees.
RELATED CONTENT: 5 Things Retailers Should Know About the Stimulus Bill
Last week, Congress passed a third stimulus package, which has allocated an additional $350 billion to small businesses and $150 billion for state and local stimulus finds. There are also provisions in the bill that will temporarily allow small businesses to claim deductions using today’s losses against past profits to claim quick refunds for cash infusions.
RELATED CONTENT: 5 Things Retailers Should Know About the Stimulus Bill
Last week, Congress passed a third stimulus package, which has allocated an additional $350 billion to small businesses and $150 billion for state and local stimulus finds. There are also provisions in the bill that will temporarily allow small businesses to claim deductions using today’s losses against past profits to claim quick refunds for cash infusions.
There’s no doubt that it can be overwhelming trying to understand and decode all the information relevant to your business in the $2 trillion stimulus package, otherwise known as the CARES (Coronavirus Aid, Relief and Economic Security) Act.
Therefore, you must rely on your corporate attorney, certified public account and, if you utilize one, your payroll company.
Remember their roles require a complete understanding of the legalities and the nuances associated with all the stimulus packages. This is precisely what you pay them for.
In fact, it’s so easy to misinterpret and/or misunderstand how some of these programs will work that I urge you to avoid taking any action until you have spoken to your experts.
You simply can’t afford costly missteps.
Start by assessing your current financial situation. What does that look like?
Define your objective, which now for many of our retailers is about sustainability. What does that look like? Am I able to be self-reliant, or do I need assistance? Perhaps it’s a combination of both, depending on
how long little to no revenue will be coming in.
Then set aside 15 to 30 minutes to create a list of questions for your team of experts.
It’s important to understand all your options when it comes to your employees and the potential legal ramifications.
A sample list of questions might look like this.
1) Am I obligated to give my employees paid leave?
1a) Does this apply to all businesses, or are small businesses exempt?
2) If I offer paid leave to my current employees, will I be fully reimbursed?
3) Is it smart to take out a loan, given the low interest rates, in order to keep my employees on paid leave?
4) What advantages and disadvantages are there between paid leave versus layoffs?
5) If I am reimbursed, how quickly will those funds come through?
6) What form will the reimbursement take, cash or tax credits?
7) If part of the reimbursement is via tax credits, when would those be realized?
8) If I lay off my employees, am I obligated to pay them their PTO (personal time off) time first?
9) If I take out a loan to use for payroll expenses, is loan forgiveness a guarantee?
10) If not, what options do I have?
11) Is there anything I have overlooked?
1a) Does this apply to all businesses, or are small businesses exempt?
2) If I offer paid leave to my current employees, will I be fully reimbursed?
3) Is it smart to take out a loan, given the low interest rates, in order to keep my employees on paid leave?
4) What advantages and disadvantages are there between paid leave versus layoffs?
5) If I am reimbursed, how quickly will those funds come through?
6) What form will the reimbursement take, cash or tax credits?
7) If part of the reimbursement is via tax credits, when would those be realized?
8) If I lay off my employees, am I obligated to pay them their PTO (personal time off) time first?
9) If I take out a loan to use for payroll expenses, is loan forgiveness a guarantee?
10) If not, what options do I have?
11) Is there anything I have overlooked?
Let me give an example of why it’s so important to do this exercise.
This excerpt is from a CNBC article published last Thursday and, yes, quickly updated the next day.
“Under the CARES Act, the loans can be for as much as 2.5 times payroll or $10 million, whichever is less. Payments can be deferred by up to a year, and businesses will be able to apply for forgiveness of the loan (or a portion of it) based on the amount used during the eight weeks following loan approval. Any amount not forgiven would have a maximum interest rate of 4 percent.”
I want to use this example because I’ve had many retailers debate keeping their employees on paid leave vs. unpaid leave because some are convinced they will be fully reimbursed.
Well, that’s simply not guaranteed. Look at the language above. While your payments could be deferred for up to a year, which would be very helpful, you will still have to apply for a forgiveness of the loan.
And, all or part of it may be forgiven, while the unforgiven portion would have a maximum interest rate of 4 percent.
One can easily see how this one paragraph could be subject to multiple interpretations.
The potential costly part to the retailer is that many of them would have to take a loan in order to grant paid leave. That’s a loan that might not be fully forgiven, which means you’ve taken on additional debt that you’ll have to pay back.
There is another article, also published last Thursday, from The New York Times that states payroll expenses would be fully covered, but there is a timeline in which you have to use those funds.
The bottom line is: There simply is no one right answer for all retailers, which is why you want to consider all the facts and ultimately make the decision that is in the best interest of your business.
Given how rapidly things are changing, you can understand why it’s imperative to rely on your team of experts. Utilize them! They will ensure you understand the impact of your chosen course of action.
At the end of the day, we all want to be standing on the other side of this pandemic.
Be well and stay healthy!
Sherry Smith is director of business development for data and consulting company The Edge Retail Academy. In her role, Smith works with wholesalers, brands and retail stores on business mentoring, and data analysis and aggregation. She can be reached at sherry@edgeretailacademy.com.
More on Independents
The Latest
MajorsJun 11, 2025
Pandora Bets on Las Vegas for First North American FlagshipThe Danish jewelry giant hosted its grand opening last weekend, complete with a Pandora pink roulette wheel.
GradingJun 11, 2025
Tiffany Stevens Exits IGI, Lab Appoints New Board LeaderIndustry veteran Anoop Mehta is the new chairman and independent director of the IGI board.
Brought to you by
Jewelers of America is Headed to Las Vegas for JCK 2025The countdown is on for the JCK Las Vegas Show and JA is pulling out all the stops.
Events & AwardsJun 11, 2025
Kering Announces Winners of Sustainability-Focused AwardThe winners of the inaugural “Kering Generation Award x Jewelry” are student Lee Min Seo and China-based startup Ianyan.
Weekly QuizJun 05, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
SourcingJun 10, 2025
De Beers Turns to Brown, Yellow Diamonds for New ‘Beacon’“Ombré Desert Diamonds” will emphasize cream-, champagne-, and brown-colored diamonds, shades that set natural stones apart from lab grown.
AuctionsJun 10, 2025
Noonans to Auction 16th-Century Signet RingIt's one of the “Gresham grasshopper” rings English financier Sir Thomas Gresham was known to gift to acquaintances or business associates.
Brought to you by
The True Power Behind the Counter: Why Sales Associates Are the Heart of the Jewelry BusinessWhen investing in your jewelry business, it's important not to overlook the most crucial element of success: the sales associates.
CollectionsJun 10, 2025
Tabayer Names Mary Chiam as CEOThe brand also debuted its new “Zorae” collection featuring a talisman of protection and harmony inspired by a sheaf of wheat.
MajorsJun 10, 2025
Lauren Johansen Joins Loudr As Loudr’s new account manager, Johansen will partner with clients to craft and execute marketing strategies.
Events & AwardsJun 09, 2025
And the Winners of the 2025 Couture Design Awards Are … Designers were recognized in 12 categories, from platinum to pearls, before the evening ended with a new, retail-focused award.
AuctionsJun 09, 2025
Nancy Astor’s Cartier Tiara Sells for $1.2MThe rare turquoise and diamond jewel was the top lot at Bonhams’ June jewelry sale.
Events & AwardsJun 09, 2025
Here Are the 2025 Retailer Hall of Fame InducteesThis year’s honorees include a Midwest retailer and two multi-store independents, one in New York and the other in New England.
Events & AwardsJun 09, 2025
CASE Awards Now Accepting Entries For 2025The deadline to submit is June 16.
MajorsJun 09, 2025
RDI Diamonds Partners With LavalierThe diamond wholesaler is working with the insurance provider to seamlessly offer personal jewelry insurance to RDI retailers’ clients.
CollectionsJun 06, 2025
Piece of the Week: Harwell Godfrey’s ‘Granny Squares Eleanor’ Necklace As an homage to iconic crochet blankets, the necklace features the nostalgic motif through a kaleidoscope of cabochon-cut stones.
Events & AwardsJun 05, 2025
The 12 Fresh Faces in Couture’s Design AtelierDiscover the dozen up-and-coming brands exhibiting in the Design Atelier for the first time.
SourcingJun 05, 2025
A Rare Suite of Rubies Has Arrived in Las VegasThe “Royal Ruby” Collection is a quintet of untreated rubies curated by collector Jack Abraham.
Events & AwardsJun 05, 2025
Daymond John to Give Keynote at JCK Las VegasThe entrepreneur and “Shark Tank” star will share his top tips for success.
MajorsJun 05, 2025
Platinum Guild International Updates Leadership TeamTwo existing executives have been given new roles.
Events & AwardsJun 05, 2025
Zillion Announces 'Women in STEM' Scholarship RecipientMeredith Tiderington, an electrical engineering student, was selected for the award.
Lab-GrownJun 04, 2025
GIA Reverting to More General Terminology for Lab-Grown DiamondsIt will quit assigning the stones specific color and clarity grades in favor of applying “new descriptive terminology.”
Events & AwardsJun 04, 2025
As JCK Talks Returns, Don’t Miss These 12 SessionsFrom design trends to sustainability, here’s a roundup of can’t-miss education sessions at JCK Las Vegas.
CrimeJun 04, 2025
10 Safety Tips for the Las Vegas Shows The Jewelers’ Security Alliance offers advice for those attending the annual trade shows.
MajorsJun 04, 2025
Amy Curran Promoted at Hill & Co.Her new role is director of strategic initiatives.
CollectionsJun 03, 2025
In Her Latest Collection, Viviana Langhoff Is Leaning Into GoldThe designer is embracing bold pieces with weight to them in “AU79,” a collection she celebrated with a creative launch party.
FinancialsJun 03, 2025
Signet Jewelers Sees Turnaround in Q1 With Sales Ticking Up 2%On an earnings call, CEO J.K. Symancyk discussed what’s working for the company and how it’s preparing for the potential impact of tariffs.
