I knew things would be bad even before I set out this week to see how jewelry stores were faring this holiday season.
I knew owners of these small businesses were facing a triple whammy: the crappy economy, sky-high gold prices and a product that's a luxury and by no means a necessity. I expected to hear more than a few tales of woe.
But I wasn't ready for the complete devastation I came across.
"It's almost Christmas," said Joel Taban, owner of Oro Shop in the heart of the jewelry district in downtown Los Angeles. "I have no orders. None."
I found Taban alone in his store, chopping pieces of gold jewelry into bits with a pair of wire cutters. He said he planned to melt the gold down and sell it to pay the rent for his business, which he has run for the last 20 years.
Taban said his sales this year have plunged more than 90% from last year. He said he expects to close his store for good within the next few months -- unless things miraculously improve.
"Normally at this time I would have seven or eight people working for me," Taban said as he snipped apart a gold bracelet. "Now I have one. And I can't pay for her."
Snip. He tossed the bracelet bits into a shoe box.
"I have been in America 30 years," Taban, who was born in Iran, said as he started prying a red jewel from a gold ring. "Never have I seen anything like this."
I heard pretty much the same from the dozen or so other merchants I spoke with. Nearly all said sales this year were down at least 90%, and many said they weren't sure if they'd be able to keep their shops open next year.
Almost all also said they too were melting down jewelry to pay the rent.
"It's dead," said Abbas Ghorob, who has owned Martinez Jewelry Mart on Broadway since 1986. "It's completely dead. The economy is sick as hell."
He said so few customers have been coming into his store recently that it's no longer worth it to put merchandise on display. That explained the empty shelves that surrounded us as we spoke.
"I have merchandise in the safe," Ghorob said. "But why should I put it out? No one is going to buy it."
The jewelry district's hundreds of merchants represent the lower end of the bling food chain. They're both wholesalers and retailers, and their customers are generally middle-income Latino folk who won't shop for luxury goods if the economy is on the skids.
But this is the beating heart of the $60-billion jewelry trade, an industry that relies on the middle class for the majority of sales.
Quick -- name the country's largest jewelry retailer. It's not Tiffany & Co. It's not Cartier.
It's Wal-Mart. The company sold an estimated $3 billion in jewelry last year.
A Wal-Mart spokesman declined to say whether jewelry sales were up or down this year, but industry analysts say the company's jewelry sales have softened.
Meanwhile, the nation's second-largest jewelry retailer, Zale Corp., said this month that it was canceling orders with some suppliers because of weak sales. It said sales at stores open at least a year were down nearly 19% in November from a year before.
Gold prices have been steadily climbing for the entire decade as investors have turned to the metal as a hedge against recession and other economic calamities. Gold was trading at about $1,086 an ounce Tuesday, almost quadruple its price at the end of 2000.
This has prompted a cottage industry in Tupperware-style parties where people sell gold jewelry and coins to professional traders, and in hoarding by sky-is-falling types who believe a cache of gold will protect them from global economic collapse.
What it hasn't done is sparked increased sales at jewelry stores. Just the opposite.
"This is the worst I have ever seen it," said Ramin Kasher, owner of Ramin Jewelry in the jewelry district. "The worst."
He said that if a customer shows even the slightest interest in a piece of jewelry, he'll consider selling it at cost just to close a sale.
"At this point, I will do whatever I can to move inventory," Kasher said.
This is an ugly situation for merchants, but clearly a boon to shoppers. Anyone who pays the full list price for jewelry, particularly at haggle-friendly places such as the jewelry district, has paid too much.
I encountered Daniel Thomas, 30, shopping for a diamond ring for his wife at a brightly lighted jewelry district store. He was the only customer.
Thomas said he'd found a ring that he liked at a mall for about $6,000. "I'm not going to pay that," he said. "So I came down here and found one that's almost the same for around half the price."
After a little bargaining with the shop's owner, Thomas said he got the ring for $2,500.
Most jewelry merchants I spoke with said they've asked their landlord for a break on the rent until the economy improves. And most said their request was rejected.
"Twenty years I have been paying rent on this store," said an angry Fred Sagezi, co-owner of Broadway Gold Center. "Twenty years! Now they should give us some help."
He said that if his landlord won't reduce the rent for at least a few months, he'll probably have to close his business.
Nick Anderson, head of Joyeria Avalon in the jewelry district, said that when the economy was stronger and gold prices were lower, he routinely earned enough to pay the rent and meet payroll expenses, plus pocket enough in profit to keep the business going.
These days, he said, forget about profit. He'd be happy just making enough to get by.
"I'm thinking about getting a real estate license or an insurance license," Anderson said. "I don't know what else I can do."
He can melt down more gold to pay the bills.
But that's not much of a survival plan.