January 2008
Survey: U.S. consumers reduce spending to combat gas prices
Survey: U.S. consumers reduce spending to combat gas prices
January 15, 2008
Shoppers combining trips, eating out less, staying home more
Schaumburg, Ill.—Nearly half (49 percent) of U.S. consumers are reducing their spending to compensate for rising gas prices, up four points from June 2007, according to new research from The Nielsen Co.
Consumers are also battling high gas prices by combining shopping trips and errands (70 percent), eating out less (41 percent) and staying home more often (39 percent).
“Our research shows consumers are adjusting their spending to a significant degree to counterbalance rising gas prices,” Todd Hale, senior vice president of Consumer Shopping and Insights, Nielsen Consumer Panel Services, said in a statement released today.
Nielsen’s survey also found that record-high gas prices likely contributed to 2007’s less-than-stellar holiday sales season. Sixty percent of consumers surveyed said they had less money to spend during the holidays due to increased gas prices.
“Unlike 2005 and 2006, gas prices didn’t drop in the fourth quarter of 2007 to enable consumers to do their typical holiday binge buying,” Hale said. “That said, our research shows a jump in consumers shopping on the Internet as a way to deal with high gas prices. This should be a wake-up call for manufacturers and retailers alike to step up their ‘direct-to-consumer’ efforts and utilize the Internet to communicate directly with consumers in 2008, emphasizing value, variety and convenience.”
Nielsen’s research also found that gas prices are impacting where consumers shop, with 27 percent of consumers reacting to high gas prices by shopping more at supercenters, or megastores and big-box stores, where more items needed are in one store.
“Discretionary spending in 2008 is likely to be a challenge for most low- and middle-income shoppers, the core supercenter shoppers,” Hale said. “Although recent store expansions mean that supercenters are closer to more shoppers, nearly a third of households still travel 11 miles or more to a supercenter, and high gas prices will likely reduce the number of quick trips these households make. Supercenter retailers will need to entice shoppers with stronger earning power who are less vulnerable to high gas prices.”
Increased fuel prices are resulting in more coupon clipping, with 25 percent of consumers using coupons to save money, up from 20 percent in June 2007. Twenty-three percent of consumers indicate they will buy less expensive grocery brands to deal with higher gas prices, signaling a possible boost for private-label or store-brand products and lower-priced branded products.
“This year will likely be challenging for U.S. consumers and the economy as a whole as we grapple with growing inflation, credit card debt, declining house values—as well as expectations for gasoline to hit $3.40 by spring,” Hale said. “Manufacturers and retailers need to be alert to the fact that consumers are looking to save by altering where they shop, how they shop and what products and brands they buy. Value, convenience and competitive pricing will be more important than ever in the year ahead.”
This research was based on Nielsen Homescan survey responses from nearly 26,000 U.S. consumers, geographically and demographically representative of the total U.S. population. The survey was conducted in December 2007, when regular gas averaged $3.06 per gallon.
The Nielsen Co. is a global information and media company with leading market positions in marketing information, media information, online intelligence, mobile measurement, trade shows and business publications, and the parent company of the National Jeweler Network.
For more information about The Nielsen Co., visit the company’s Web site, Nielsen.com.
New Gucci timepiece honors 2008 Olympics
New Gucci timepiece honors 2008 Olympics
January 15, 2008
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| The 8-8-2008 I-Gucci timepiece, the company’s first digital timepiece, commemorates the year 2008 on the caseback. |
New York—Gucci is releasing two special-edition watches to honor both its largest store opening and the 2008 Olympics: the exclusive New York Signoria timepiece with bone dial and the limited-edition 8-8-2008 I-Gucci.
The New York Signoria timepiece, crafted in yellow gold and diamonds with bone dial, is one of several products Gucci Creative Director Frida Giannini has designed exclusively for the February opening of the company’s largest store at 725 Fifth Ave. in Manhattan.
Other pieces to be sold exclusively at the New York City store include the brand’s signature horsebit iconology with a mix of cognac topaz and diamonds, such as a drop-cut cognac topaz and diamond cocktail ring, matching earrings and a necklace featuring a drop-cut cognac topaz offset by 156 diamonds, totaling 45.11 carats.
The 8-8-2008 I-Gucci collection, which launches this month, contains eight sports-driven accessories in honor of the upcoming Olympics.
The 8-8-2008 I-Gucci timepiece, the company’s first digital timepiece, boasts a black dial, steel frame and a clean digital face with a red and green logo commemorating the year 2008 on the back. The exterior of its red rubber strap is engraved with the Gucci logo, while the interior has been engrossed with Gucci’s iconic GG pattern. The timepiece allows the wearer to select a dedicated Beijing time zone code on the display too.
For all eight accessories, the color red permeates the collection.
“Not only does red evoke happiness and celebration, two emotions that couldn’t be more appropriate to describe the excitement brought by the international sport games, but it also happens to be a very fashionable color for 2008,” Giannini said in a media release. “I also designed just eight products for this collection, which mirror the lucky number eight in Chinese culture.”
Maurice Lacroix relocates to New Jersey
Maurice Lacroix relocates to New Jersey
January 15, 2008
Hackensack, N.J.—The U.S. subsidiary of luxury Swiss watch manufacturer Maurice Lacroix is relocating to Hackensack, N.J., after a 12-year stint in Encino, Calif.
The company cites several reasons for the office relocation, including the shift in new management (watch industry veteran Randi Shinske joined Maurice Lacroix as president and chief executive officer in May 2007), the ability for improved communication between the U.S. and Swiss headquarters, and to move closer to the pulse of the jewelry and watch industry in all major media outlets in New York City.
The New Jersey office is located at 401 Hackensack Ave., 8F, Hackensack, N.J. 07601.
In addition to relocating, the U.S. office has been incorporated as Desco Luxury (Americas) Inc. with Maurice Lacroix as its primary luxury watch brand.
This was done to achieve greater worldwide uniformity and in anticipation of future luxury watch brands.
For more information about Maurice Lacroix, call (201) 996-1800 or visit the company’s Web site, Mauricelacroix.com.
Breeden raises stake in Zale, again
Breeden raises stake in Zale, again
January 15, 2008
New York—Activist investor Breeden Capital Management LLC’s stake in jewelry chain Zale Corp. continues to grow, a Securities and Exchange Commission (SEC) filing on Tuesday shows.
The Greenwich, Conn.-based investment fund, controlled by former U.S. SEC Chairman Richard Breeden, reported owning about 7.9 million shares, or a 17.7 percent stake in the company, up from 15.9 percent.
According to The Associated Press, this is the fourth time this month Breeden has raised its stake in Zale.
Breeden previously has said it plans to pursue discussions with Zale management, the board and other shareholders about the company’s strategy and what steps the company can take to increase shareholder value.
In its latest earnings call, Zale reported a 9 percent decrease in same-store sales for November and December 2007. Total revenues for the two-month period were $723 million, compared with $804 million during the same period in 2006, a 10.1 percent decline.
The company also is under new management, with former The Children’s Place Retail Stores President Neal Goldberg taking the helm after President and CEO Betsy Burton stepped down in December.
Breeden himself has been noted in recent years for shaking things up at such large companies as H and R Block Inc. and Applebee’s.
Editor’s note: For earlier developments in this story, see Breeden ups stake in Zale.
NRF: Holiday sales up 3 percent in 2007
NRF: Holiday sales up 3 percent in 2007
January 15, 2008
Lowest holiday season growth rate since 2002
New York—The 2007 holiday selling season, which combines both November and December sales, increased 3 percent to $469.9 billion, weaker than the National Retail Federation’s (NRF) projected 4 percent holiday forecast, the association announced today.
This represents the lowest holiday season growth rate since 2002, when sales rose 1.3 percent.
December retail sales released today by the U.S. Commerce Department (excluding automobiles, gas stations and restaurants) increased just 1.7 percent unadjusted over last year and decreased 0.4 percent seasonally adjusted from November.
Total retail sales for the month (including non-general-merchandise categories such as automobiles, gas stations and restaurants) increased 3.2 percent unadjusted over last year and dipped 0.4 percent seasonally adjusted from last month.
In addition, November retail sales were revised downward to a 4.7 percent growth rate from the initial 5.1 percent that was reported last month.
“Economic pressures caused deterioration in the sales climate at the end of the year,” NRF Chief Economist Rosalind Wells said in a statement. “Because holiday sales were disappointing, retailers will have to quickly adapt with pricing strategies and promotions that will encourage consumers to spend.”
Health and personal-care stores posted the strongest gains in December, with sales increasing 3.7 percent unadjusted over last year and 0.7 percent seasonally adjusted from November. General-merchandise stores also saw small gains, with sales increasing 2.1 percent year-over-year and 0.3 percent from the previous month.
Clothing and clothing accessories stores, department stores, furniture stores and home furnishings stores fared the worst.
The NRF is forecasting that retail sales will increase 3.5 percent in 2008.
The NRF is the largest retail trade association in the world, with members including department, discount, drug, grocery, independent and specialty stores, catalog merchants, chain restaurants and e-tailers, as well as the industry’s key trading partners of retail goods and services.
For more information about the NRF, visit its Web site, NRF.com.
Gold tops $900 an ounce
Gold tops $900 an ounce
January 15, 2008
New York—High oil prices, a weak dollar and fears of a U.S. recession continue to push the price of gold skyward.
Bloomberg news reported that gold futures for February delivery rose to $906.40 an ounce on the Comex division of the New York Mercantile Exchange.
The first time gold topped $900 an ounce was on Friday, when the price jumped $6.50 to $900.10 in morning trading, an all-time high and a psychologically important milestone, The Associated Press reported.
“It’s a reflection of market sentiment: Gold is a hedge against uncertainty and right now it’s the best bet,” Carlos Sanchez, a precious-metals analyst at CPM Group in New York, told the AP. “None of the other investment options look that great and gold does.”
Despite topping $900 an ounce, when adjusted for inflation, gold remains well below its all-time high. In 1980, gold cost $875 an ounce, which would equal $2,115 to $2,200 an ounce today.
Bloomberg reported on Tuesday that prices increased for platinum, palladium and silver as well.
Silver for immediate delivery rose $2.63 to $16.4113 an ounce, platinum increased $1 to $1,578 an ounce, and palladium gained $1.25 to $379.75 an ounce.
Editor’s note: For the latest precious-metal prices, see our Wholesale Material Pricing Tools.
NRF: 2007 Holiday Sales Up 3%
Retail industry sales for December (which exclude automobiles, gas stations, and restaurants) rose 1.7 percent unadjusted over last year and decreased 0.4 percent seasonally adjusted from November, according to the National Retail Federation. In addition, November retail industry sales were revised downward to 4.7 percent growth from the initial 5.1 percent that was reported last month.
As a result, 2007 holiday sales, which combine November and December sales, rose three percent to $469.9 billion, weaker than NRF’s projected four percent holiday forecast. This represents the lowest holiday season growth since 2002, when sales rose 1.3 percent.
“Economic pressures caused deterioration in the sales climate at the end of the year,” said NRF chief economist Rosalind Wells. “Because holiday sales were disappointing, retailers will have to quickly adapt with pricing strategies and promotions that will encourage consumers to spend.”
December retail sales released today by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) dipped 0.4 percent seasonally adjusted from last month and rose 3.2 percent unadjusted year-over-year.
Seasonal bright spots were seen by health and personal care stores where unadjusted sales grew 3.7 percent year-over-year and 0.7 percent seasonally adjusted from November. General merchandise stores also saw small gains, with sales increasing 2.1 percent year-over-year and 0.3 percent from the previous month. Weakness was seen by clothing and clothing accessories stores, furniture and home furnishings stores, and department stores.
NRF is forecasting that retail industry sales will increase 3.5 percent in 2008.
Charles & Colvard Lowers 2007 Forecast
Charles & Colvard, Ltd., the sole source of moissanite used in fine jewelry, has lowered its 2007 revenue forecast and hired a consulting firm to assess the Morrisville, N.C.-based company’s business model and provide recommendations for improved sales performance.
The company, based on sales information as of Jan. 11, has adjusted its fiscal 2007 revenue forecast (ended Dec. 31) to a range of $27 million to $28.4 million—down from its previous revenue guidance of $30 million to $33 million. The company did not say when it will release its fourth quarter and year-end report.
Charles & Colvard has engaged Kanter International, a Philadelphia-based business and brand building consulting firm. The business model review will include evaluating the supply chain, sales distribution channels, and marketing program. In addition, Kanter will identify internal and external resources, both human capital and financial support, required to implement any changes to the company’s business model.
“While we have achieved increased consumer awareness over the last year and consistently maintained a healthy gross margin rate of between 70-75 percent, we have not achieved the level of revenue growth we anticipated," said Bob Thomas, Charles & Colvard chairman and chief executive officer.
JSA Celebrates 125th with Good Crime News
The Jewelers’ Security Alliance’s 125th anniversary luncheon at the Rainbow Room Saturday began with relatively good news—only one person in the jewelry industry had been killed on duty in 2007.
Compared to years when the number of fatalities regularly topped double digits, it’s an impressive achievement, said JSA executive director John Kennedy. "Just five or six years ago, there was a lengthy list," he said. "This is the first person killed since March 2006. That’s a tremendous achievement.
"The industry has grown much safer and less violent," he continued. "We get such spectacular assistance from the FBI and law enforcement that criminals now try to avoid the jewelry industry. There is a tremendous increase in sharing information with law enforcement and the FBI. We have launched a major project to start grass-roots jeweler crime prevention networks."
The planned speaker, Robert S. Muller, the director of the FBI, could not make it, but sent in his stead Mark Mershon, the assistant director in charge of the New York division.
Mershon urged the industry to continue its communication with his agency.
"The more you inform us, the better we are able to articulate internally that your crime problem is so serious," he said.
He noted that his department’s main responsibility these days is protecting Americans from threats of terrorism. He noted a plan was disrupted which would have blown up a number of aircraft over American cities in the summer of 2006. The death toll could have exceed Sept. 11’s, Mershon said.
"There are people who have become somewhat complacent about the threat to our company of an accomplished attack," he said. "We are still very much at risk."
The JSA also honored Jewelers Mutual, Rolex Watch Co., and the JCK Group for their contributions to the group.
JA Helps Jewelers with De Beers Settlement
Jewelers of America has created three guidance documents to help retail jewelers address questions referring to the proposed De Beers settlement.
With the Jan. 9 release of De Beers settlement notice advertisements in newspapers and press releases to print, radio and television journalists, retailers are likely to begin hearing from consumers who wish to file claims.
JA’s guidance documents are designed to prepare JA retail members to answer questions about the De Beers settlement with assurance and knowledge. The three one-page documents cover: background on the case itself, guidance on how to answer consumers’ questions, and guidance on how to answer media questions. Members can access the documents at Jewelers of America’s website, www.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,” said JA president and chief executive officer Matthew A. Runci. “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.”
De Beers settlement notices will continue throughout the winter and early spring. The notice campaign is 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 purchases of diamond jewelry, 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. Jewelers of America’s guidance documents are designed to provide jewelers with simple answers to these basic questions.
For more information about the De Beers Settlement, visit www.diamondsclassaction.com or call 1-800-760-5431.