January 2008
JA assists members in De Beers settlement
JA assists members in De Beers settlement
January 11, 2008
New York—Jewelers of America (JA) has released three guidance documents to assist its members in answering consumer and media questions on the De Beers Indirect Purchaser/Reseller class-action settlement.
The three one-page documents cover background on the case itself, guidance on how to answer consumer questions and guidance on how to answer media questions. Members can access the documents at JA’s Web site, Jewelers.org, in the Members Only area.
“With the release of information about the De Beers settlement to consumers and the media, Jewelers of America wants to assist our members in answering the public’s questions,” JA’s President and Chief Executive Officer Matthew A. Runci said in a media release. “Jewelers of America and its counsel have had significant involvement in commenting on the De Beers settlement process and timing since it began several years ago, and we now want to ensure that our members are prepared too.”
JA said the De Beers settlement notices will continue throughout the winter and early spring, with the notice campaign expected to reach 87 percent of the consumer settlement class, which is defined as adults 18 and over with a household income above $50,000.
Because the claims process will require consumers to itemize the amount of their diamond-jewelry purchases, consumers may ask retailers to research the purchase price of any diamond or diamond jewelry they obtained at their stores between Jan. 1, 1994, and March 31, 2006. In addition, consumers may need information on where to go to file a claim, object to or opt out of the proposed settlement. JA’s guidance documents are designed to provide jewelers answers to these questions.
For more information about the De Beers settlement, call (800) 760-5431 or visit the Diamond Class Action Settlement Web site, Diamondclassaction.com.
Editor’s note: For related news, see JVC further advises in claims process.
2008 industry forecast
2008 industry forecast
January 06, 2008
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| Cuff love continues into 2008. Here, Ali Larter in 22-karat yellow gold and rose-cut diamond cuff bracelets by Bochic. |
This year will test your mettle, especially if you’re a jeweler targeting the lower- to middle-market consumers who have been pummeled by the credit crunch, mortgage rates, gas prices and other economic concerns.
But our 2008 forecast reveals tough times can also usher in a sweet year of innovations in design, business alliances, and of course, retail.
For a preview of the year ahead in fashion, diamonds, watches and retail, download our 2008 industry forecast.
For National Jeweler Network exclusives on what’s in store in 2008 for online retailers and the majors, see Online retail shows no signs of slowing in ‘08 and Mass-market consumers may not trade up in 2008.
MVI’s Chatelain to discuss U.S. majors in Mumbai
MVI’s Chatelain to discuss U.S. majors in Mumbai
January 11, 2008
Paso Robles, Calif.—MVI Marketing Co-founder and Chief Executive Officer Liz Chatelain, who specializes in the Indian market, will address the state of the U.S. major retailers to the Indian diamond and jewelry industry in Mumbai, India, on Jan 22.
Participants will include Indian rough- and loose-diamond companies as well as finished-jewelry manufacturers and industry VIPs.
“They are worried about the current U.S. retail market and what the future will bring,” Chatelain said in a media release. “They are hearing a lot of bad news from the States about retailing, and with the weak dollar, they lose money with every U.S. order.”
Topics that will be addressed include the shift of luxury spend away from fine jewelry, the U.S. economy and retailer consolidation.
The lecture, which is being sponsored by the Indo Argyle Diamond Council, will be held at the Le Royal Meridien Hotel in Mumbai.
For more information, contact MVI Marketing’s Melina Trujillo at mtrujillo@mvimarketing.com or (805) 239-2994 ext. 103.
Saks holiday sales soar 10.2 percent
Saks holiday sales soar 10.2 percent
January 11, 2008
New York—Same-store sales at Saks Inc. increased 0.8 percent for the five weeks ended Jan. 5, with fine jewelry as one of the top sellers, the company announced yesterday.
Owned sales increased 0.8 percent to $447.7 million for the period, compared with $444 million for the five weeks ended Dec. 30, 2006.
For the two-month holiday selling period ended Jan. 5, same-store sales skyrocketed 10.2 percent, and owned sales increased 10.6 percent to $795.3 million, compared with $719.2 million for the two months ended Dec. 30, 2006.
As expected, comparable-store sales were outsized in November and below average in December due to the retail calendar shift and promotional adjustments.
On a year-to-date basis, same-store sales increased 12.3 percent for the 11 months ended Jan. 5, and owned sales increased 13.9 percent to $3,058.8 million, compared with $2,684.9 million for the 11 months ended Dec. 30, 2006.
For December, the strongest categories at Saks Fifth Avenue were fine jewelry; women’s shoes, accessories and handbags; men’s accessories, shoes and contemporary apparel; and outerwear.
The weakest categories were women’s modern collections, women’s contemporary sportswear, women’s “gold range” apparel and Salon Z (women’s large sizes).
Saks Direct and Off 5th performed well for the month.
As expected, the company continues to experience a more challenging macroeconomic and competitive environment, and consistent with third-quarter trends, customers have continued to shift more of their spending to promotional events.
As previously disclosed, management expects same-store sales growth of high-single digits in the aggregate for the fourth quarter.
Saks Inc. currently operates Saks Fifth Avenue, which consists of 54 Saks Fifth Avenue stores, 49 Saks Off 5th stores and Saks.com. The company also operates Club Libby Lu specialty stores.
Macy’s holiday sales tumble
Macy’s holiday sales tumble
January 11, 2008
Cincinnati—Same-store sales at Macy’s Inc. for the five weeks ended Jan. 5 plummeted 7.9 percent, following a 13.4 percent increase in November, the company announced.
Combined November-December same-store sales decreased only 1.1 percent, however, consistent with the company’s fourth-quarter guidance.
According to Macy’s, sales for the two-month holiday selling period need to be considered together rather than individually for each month, due to the calendar shift between November and December.
“After a strong November, we had hoped that a more positive sales trend would continue through December. But macroeconomic trends led customers to spend cautiously for the holiday,” Macy’s chairman, president and chief executive officer Terry J. Lundgren said in a statement released yesterday. “That said, we remain on track to be within our guidance for same-store sales in the fourth quarter, albeit at the low end of the range of down 2 percent to up 1 percent.”
Total sales for the five weeks ended Jan. 5 decreased 7.4 percent to $4.624 billion, compared with total sales of $4.995 billion in the five weeks ended Dec. 30, 2006.
For the year to date, Macy’s sales totaled $25.051 billion, down 0.5 percent from total sales of $25.188 billion in the first 48 weeks of 2006. On a same-store basis, Macy’s year-to-date sales were down 1 percent.
The company expects January same-store sales to be down 4 percent to 6 percent compared with last year.
Macy’s Inc., with corporate offices in Cincinnati and New York, is one of the nation’s premier retailers, with fiscal 2006 sales of $27 billion. The company operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy’s and Bloomingdale’s. The company also operates Macys.com, Bloomingdales.com and Bloomingdale’s By Mail.
Online retail shows no signs of slowing in ‘08
Online retail shows no signs of slowing in ‘08
January 06, 2008
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| New Web site Vialuxe plans to offer a concierge-style service for consumers seeking luxury watch and jewelry brands. |
Although many jewelers remain reluctant to embrace e-commerce, jewelry experts project online sales will do nothing but rise in the coming years.
The Internet’s increasing success in the retail arena is clearly reflected in the naming of “Cyber Monday,” the Monday after Thanksgiving, which has become an online-sales litmus test on par with Black Friday for brick and mortars. In 2007, Cyber Monday sales hit $773 million, up 21 percent from 2006, according to ComScore Inc. And although jewelry retailers aren’t the primary driver of those sales, they do play into the market.
For instance, Diamond.com’s traffic rose 58 percent on Cyber Monday, with a 65 percent sales increase reported too, according to Shop.org, an online association for retailers. Luxury retailer Tiffany and Co.’s e-commerce site continues to reel in holiday sales, and major diamond powerhouse De Beers opted to tap into the e-commerce market too this past year.
Scott Silverman, executive director of Shop.org, says online retail is simply still growing.
“The numbers we are seeing for the holiday season aren’t giving us any indication that it’s slowing down,” Silverman says, adding that consumers opt to shop online primarily for convenience.
Despite the evidence suggesting the importance of businesses offering Web sites, not all retailers are going with the flow. Ben Janowski of Janos Consultants says the Internet is the only retail channel that is still growing by huge numbers, and he believes it’s nonsensical for retail jewelers to choose to remain Web-free because they think customers won’t consume online. Although Janowski acknowledges there are still consumers who won’t shop online, he stresses the importance of the ones who will and projects the increase of jewelers’ presence online.
Jewelers of America’s (JA) 2007 Cost of Doing Business Survey revealed that the level of growth for jewelry retailers using the Internet has mostly leveled off, with 40 percent of retailers using the medium for promotional purposes in 2006—the same number that did so in 2005. More retailers are using the Internet to sell, however: 28 percent of those surveyed use the Internet for both promotion and sales, which is up from the 21 percent who reported doing so in the 2006 version of the report.
Bill Farmer Jr. of Farmer’s Jewelry in Lexington, Ky., boasts an online site that offers both information about the store and the designers it carries, but currently does not offer e-commerce.
Farmer says consumers use the store’s site instead as a research tool.
Unity Marketing’s Luxury Tracking Study, conducted in October, revealed that luxury consumers are definitely using the Internet, but jewelry isn’t their top shopping destination. When it comes to using the Internet to “support” purchases in the personal luxury categories, automobiles were the top draw for luxury consumers (68 percent of respondents seeking a car checked out automobile Web sites), but jewelry was the second to last (35 percent), trailed only by wine and spirits (11 percent). However, some 48 percent of luxury consumers turned to the Internet when considering a watch purchase.
Specifically, the study revealed that only a third of jewelry customers, 35 percent, used the Internet to support their purchases in the last three months, and of this number, 53 percent purchased goods over the Internet, while 51 percent used the Internet to compare prices.
Pam Danziger, founder of Unity Marketing, says she believes Internet sales will continue to increase since they currently constitute only a small percentage of overall retail sales. She says, however, that consumers tend to get more reluctant to buy when e-commerce ventures into too high of a price range.
Whatever the case, she says, retailers are foolish if they don’t utilize an Internet strategy.
Innovative jewelry Web sites to help luxury consumers buy more easily are also springing up. ViaLuxe defines itself as a luxury Web site dedicated to helping consumers research, find and purchase luxury watch and jewelry brands.
Lawrence Kosick, co-founder of ViaLuxe (Vialuxe.com), says watch and jewelry e-commerce is one of the fastest growing online categories. The ViaLuxe site offers product information—and even blogs—on various jewelry and watch brands, and directs consumers to authorized dealers to buy.
As the luxury industry grows, Kosick says discerning consumers will expect the same kind of service they receive when going into brick-and-mortar high-end stores, and therefore, believes in the importance of luxury sites boasting a concierge-type service too, which the site plans to add in the future.
Internet influence
On average, 44 percent of luxury consumers made use of the Internet before making purchases (but didn’t necessarily buy). Here’s a breakdown by category.
* Automobiles: 68 percent
* Clothing and apparel: 56 percent
* Watches: 48 percent
* Fashion accessories: 47 percent
* Fragrance, cosmetics, beauty products: 45 percent
* Jewelry: 35 percent
* Wine, spirits: 11 percent
Source: Unity Marketing Luxury Tracking Report, 2007
DTC hiking up price of rough
DTC hiking up price of rough
January 11, 2008
By Michelle Graff
London—The Diamond Trading Co. (DTC) is upping the price of its rough diamonds 3.5 percent at next week’s January sight.
In an e-mail to National Jeweler, DTC spokeswoman Louise Prior stated that the increase would focus on the higher-end range of rough and “other areas of strong demand.”
She went on to state that the DTC would continue to amend prices “according to its assessment of prevailing market conditions.”
DTC sightholders will receive summary updates on price adjustments in Feburary, May and August to align with major trade fairs and key selling periods.
The DTC, the distribution arm of De Beers, pruned down its list of sightholders late last year, cutting the total international number from 93 to 79.
December Department Store Roundup
Luxury department stores managed to hold their own with single-digit increases for the month of December. Those stores that cater to middle-class shoppers saw sales declines during the important holiday season month. Individual store performances are as follows:
Neiman Marcus, Inc. said that for the five-week period ended Dec. 29, same-store sales increased 2.9 percent to $709 million, year-over-year. Total revenues for the Dallas-based retailer were of $723 million, up 4.9 percent year-over-year.
Its Specialty Retail Stores segment, which includes Neiman Marcus Stores and Bergdorf Goodman, increased 1.8 percent for the period. Revenue growth trends were the strongest in the company’s stores in the Midwest, Texas, and New York City. The merchandise categories in the segment that performed the strongest included women’s shoes, designer handbags, beauty and men’s shoes and sportswear.
Comparable revenues at Neiman Marcus Direct for December increased 8.4 percent. The top selling merchandise categories in the Direct Marketing segment included designer shoes and handbags, women’s contemporary sportswear, jewelry, and men’s furnishings.
Saks Inc. said same-store sales rose 0.8 percent on December, on the strength of fine jewelry, shoes, and outerwear sales.
The New York-based retailer, which operates Saks Fifth Avenue and Off 5th stores, said same-store sales in November rose 25.7 percent. November and December results were skewed because of a calendar shift. For the combined two months same-store sales increased 10.2 percent year-over-year.
Total sales for the five weeks ended Jan. 5 rose 0.8 percent to $447.7 million.
The weakest performer in December was women’s clothing, including modern collections, sportswear, and large sizes, Saks said.
Nordstrom, Inc. said same-store sales decreased 4 percent, hurt by a calendar change.
The Seattle-based retailer said preliminary data indicated total sales for the five weeks ended Jan. 5 fell 3.8 percent to $1.2 billion.
A change in the retail calendar shifted a week of holiday sales into the prior month. For November, Nordstrom reported a same-store sales increase of 8.7 percent.
Macy’s, Inc. reported that same-store sales were down 7.9 percent for the five weeks ended Jan. 5. Total sales for the period were $4.6 billion, a decrease of 7.4 percent compared to the prior-year period.
For the November-December period combined, the retailer, with corporate offices in Cincinnati and New York, said Macy’s, Inc.’s same-store sales were down 1.1 percent.
"Given the calendar shift between November and December, we noted previously that the two-month holiday selling period needed to be viewed together rather than each month individually," said Terry J. Lundgren, Macy’s, Inc. chairman, president and chief executive officer. "After a strong November, we had hoped that a more positive sales trend would continue through December. But macroeconomic trends led customers to spend cautiously for the holiday."
JC Penney said same-store sales decreased 7.5 percent for the five weeks ended Jan. 5, year-over-year. Total company sales for the period fell 5.6 percent to $ 3.17 billion. Department store sales decreased 4.5 percent to 2.8 billion. The company said sales "continued to be impacted by a challenging consumer environment," and also were affected by a calendar shift.
The best performing merchandise categories for the Plano, Texas-based retailer in December were seasonal gift items across all divisions, housewares in the home division, family shoes and women’s apparel, with the weakest being fine jewelry and big-ticket home categories. Geographically, the best performances were in the northwest and southwest regions of the country, with softer results in the northeast and central regions.
Internet sales through www.jcp.com increased 12.2 percent for the nine-week November and December period, but decreased 5.1 percent for the month. Total direct sales fell 12.9 percent. The company said it continued to see good response to its Christmas book, with the best performing merchandise category being women’s apparel.
Kohl’s Corp. said same-store sales fell 3.4 percent over the five-week period ended Dec. 30. Same-store sales fell 11.4 percent on a reported basis. However, last year’s retail reporting calendar included 53 weeks. On a calendar-adjusted basis, comparing the five weeks ended Jan. 5, to the five weeks ended Jan. 6, 2007, same-store sales decreased 0.7 percent.
"Customers’ shopping patterns were driven by a search for value and they responded well to promotions closer to Christmas and post-holiday," said Larry Montgomery, chairman and chief executive officer of the Menomonee Falls, Wis.-based retailer. "Our sales results reflected these deeper discounts, affecting our gross margin. In addition, we have been aggressive in our clearance strategy to ensure we have the appropriate inventory content and level entering fiscal 2008."
Gold Prices Top $900
Gold futures rose above $900 an ounce for the first time Friday, according to media reports.
An ounce of gold for February delivery on the New York Mercantile Exchange jumped $6.50 to $900.1 in morning trading, an all-time high and a psychologically important milestone, The Associated Press reports. Gold later slipped to $898.70 an ounce but remained in record territory.
High oil prices, a weak dollar, and fears of a U.S. recession led investors to keep buying the precious metal, the AP reports.
Meanwhile, Marketwatch.com said the price reached record levels after Thursday’s comments by Federal Reserve Chairman Ben Bernanke, which it said were widely interpreted as signaling further rate cuts, which could further lower the value of the dollar.
Still, when adjusted for inflation, gold remains well below its all-time high. An ounce of gold at $875 in 1980 would be worth $2,115 to $2,200 today.
Gold has risen 32 percent in 2007, boosted by rising prices for oil and other commodities, and by the falling U.S. dollar.
Tiffany & Co.’s U.S. holiday sales fall
Tiffany & Co.’s U.S. holiday sales fall
January 11, 2008
New York—Tiffany & Co.’s sales worldwide rose 8 percent (6 percent at constant exchange rates) over the holidays, but the domestic market proved to be a sore point, with U.S. same-store sales for the high-end retailer dropping 2 percent in November and December.
This downturn in sales for the usually robust retailer is a reflection of the unstable state of the U.S. economy in which uncertain consumers are hanging on to their money, the company said. By comparison, last year, Tiffany & Co. saw same-store U.S. holiday sales increase 8 percent.
Overall, Tiffany & Co. reported only a 4 percent increase in total U.S. retail sales, with holiday spending totaling $449.1 million.
“We believe a recent pullback in U.S. spending likely reflected a more cautious attitude among customers about the near-term direction of the economy and related factors,” Tiffany & Co. Chairman and CEO Michael J. Kowalski said in a statement. “From a product perspective, we saw healthy sales growth in the engagement jewelry and silver jewelry categories.”
In a reversal of what the retailer has seen in previous years in which the economy was shaky, consumers in the U.S. actually spent more per item, but there were fewer shoppers, he said in a conference call.
At its New York flagship store, holiday sales were up 10 percent over last year, an increase driven by foreign tourist spending, the company says.
Internationally, retail sales rose 18 percent (and 12 percent on a constant-exchange-rate basis) to $334.8 million, on par with the 2006 holiday sales increase. Globally, same-store sales were up 5 percent.
Despite a slow holiday season in the U.S., Tiffany & Co. is optimistic about 2008.
The company announced during the conference call that, in partnership with Milan-based luxury eyewear company Luxottica, it is expanding its offering to include a line of eyeglasses.
In addition, Tiffany & Co. plans to open five new U.S. stores in the coming year and 15-20 stores in Asia and Europe, representing a 12-15 percent increase in total store square footage for the company.