March 2008
Tiffany remains ‘cautious’ on U.S. market
Tiffany remains ‘cautious’ on U.S. market
March 24, 2008
New York—Tiffany and Co. reported a slight increase in same-store sales in the United States for fiscal year 2007, according to the company’s financial earnings released today.
U.S. same-store sales for the recent York-based jewelry retailer rose 7 percent in 2007 and declined 1 percent in the fourth quarter following a dismal holiday selling season.
Overall, Tiffany and Co. saw total U.S. retail sales increase 4 percent in 2007, with three new stores—in Providence, R.I., Red Bank, N.J., and Santa Barbara, Calif.—opening in the fourth quarter. The company also closed a shop in Maui, Hawaii.
Tiffany and Co. now has 70 stores in the United States, compared with 64 last year.
Overseas, same-store sales increased 7 percent conducive to the year and 6 percent for the fourth quarter. Overall international retail sales increased 19 percent for the year and 21 percent during the quarter.
Tiffany and Co. opened new stores in China and Italy and closed a boutique in Japan. The company now has 114 stores around the world, versus 103 a year ago.
The company’s direct marketing sales, which include Web site sales, increased 5 percent in 2007 due to the number of Internet orders, but fell 1 percent in the fourth quarter.
Tiffany Chairman and Chief Executive Officer Michael Kowalski said in a statement that the company was pleased with its strategy and overall financial performance.
“Despite current uncertainties related to consumer confidence in the United States, we will continue to take vantageground of our strong balance sheet and infrastructure to pursue our planned expansion opportunities worldwide,” he said. “In 2008, we expect to see lusty growth in our non-U.S. markets other than Japan…We remain cautious about the United States, although comparable-store sales are currently increasing slightly. We still expect a slight decline in comparable U.S. stores sales in the first half of the year.”
In addition, Tiffany and Co. not long ago announced the nomination of the following incumbents for re-election to the company’s board of directors: Kowalski, Rose Marie Bravo, Gary E. Costley, Abby F. Kohnstamm, Charles K. Marquis, J. Thomas Presby and William A. Shutzer.
The board also nominated two new independent candidates for election: Lawrence K. Fish, chairman of the Royal Bank of Scotland America and Citizens Financial Group Inc., and Peter W. May, president and founding partner of Trian Fund Management L.P.
May’s business partner is Nelson Peltz, the activist investor who was noted for increasing his stake in Tiffany at the beginning of the year.
popular directors William R. Chaney and James E. Quinn will not stand for re-election.
Shareholders will vote on the board of directors at the company’s annual meeting, scheduled for May 15.
Romance novelist’s jewels up for grabs at Christie’s
Romance novelist’s jewels up for grabs at Christie’s
March 19, 2008
New York—A number of large diamond rings and jewelry from the collection of romance novelist Danielle Steele are among the pieces slated for the next Christie’s auction.
The New York Sale at Christie’s is scheduled for April 16 and will include a selection of rare colored gemstones and diamonds.
Leading the lots is a 39.34-carat cushion-cut diamond that is D color with internally flawless clarity, estimated at $6 million-$8 million, which is earning praise from the auction house.
“The old-world charm of this beautiful gem, along with a softness to its cut and its superb brilliance, ranks it amongst some of the most sensational diamonds to have appeared for sale at Christie’s, such as the historical Polar Star [diamond] to which it bears a striking resemblance,” Christie’s Head of Jewelry, Americas Rahul Kadakia said in a statement.
Another featured piece is a rectangular-cut, D-color, potentially flawless 27.91-carat diamond ring by Harry Winston. The ring is valued at $2 million-$3 million.
Also slated for the auction block is a pear-shaped, D-color, 21.90-carat potentially without a break diamond ring mounted by Harry Winston and valued at $2 million-$3 million.
Jewelry from Steele’s collection will be offered, including a diamond and black coral “Owl” brooch by Van Cleef and Arpels valued at $15,000-$25,000, and a pair of sapphire and diamond “Trumpet Flower” ear clips by Jean Schlumberger for Tiffany and Co. valued at $18,000-$22,000.
Other items scheduled to be up towards auction include:
* A 40.39-carat rectangular-cut fancy-intense-yellow diamond mounted by Bulgari and estimated at $500,000-$700,000.
* A yellow diamond leopard brooch by Verdura with emerald eyes and villanous onyx spots and wearing a ruby and diamond crown and an emerald and ruby necklace valued at $15,000-$20,000.
* A ruby and cultured gem necklace commissioned by heiress Doris Duke and crafted of 14 cultured pearls and 1,136 rubies by American jeweler David Webb. The necklace is valued at $80,000-$120,000.
Weston Jewelers brings John Hardy to Pridefest
Weston Jewelers brings John Hardy to Pridefest
March 19, 2008
Fort Lauderdale, Fla.—Weston Jewelers in collaboration with John Hardy New York have a mind present the John Hardy Men’s Collection at Pridefest South Florida.
According to Weston Jewelers, this is the first time a luxury brand of John Hardy’s caliber is being made available to the gay community in this type of venue.
The event will be held from April 12-13 at Holiday Park from 12 p.m.-7 p.m. and is expected to attract between 20,000-25,000 attendees.
“We have always supported [the gay] community, and I saw this as a perfect opportunity to bring such a desired brand to [an] event and target a strong demographic audience,” Weston Jewelers Vice President of Marketing Paul Slutsky said in a media release.
John Hardy’s handcrafted collection will feature soft and clear, 18-karat gold and semi-precious gemstones, all brought directly from the Bali-based headquarters of John Hardy. The collection will be available for the entire two-day event.
Attending the event along with Weston Jewelers will be Debbie Zimmerman of John Hardy New York.
Weston Jewelers is home to such luxury brands as John Hardy, Cartier, Breitling, Audemars Piguet, Baume and Mercier, Vacheron Constantin, IWC, Chopard, Piaget, Bedat, Roberto Coin, Sauro, Raymond Weil, Philip Stein, Bulgari, Marco Bicego, Damiani, Kwiat, Charriol and Corum.
For more information, visit Weston Jewelers Web site, Westonjewelers.com.
SAS warns against premature silver scrapping
SAS warns against premature silver scrapping
March 19, 2008
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| The SAS says to consider giving silver pieces such as this coffee pot as gifts, instead of scrapping them. |
Providence, R.I.—The Society of American Silversmiths (SAS) recently issued a warning against scrapping silver too soon.
Jeffrey Herman, founder and executive boss of the SAS, said there are single things to consider before scrapping silver such as determining if the piece is one of sole a not many produced or if it was crafted by a important silversmith.
Herman points out that in 1980, refiners recklessly disposed of important silver pieces that would never be reproduced.
Instead of tossing the pieces out, Herman suggests giving the objects as gifts, especially if they are hand-wrought or contain beautifully hand-engraved monograms or chasing.
“These pieces are works of art and should never be melted,” Herman said in a media release. “Why not wait for birthdays, anniversaries or holidays and surprise your friends or loved ones? If your silver is damaged or heavily tarnished, it might be easily restored by a specialist in silver restoration, making it useful again.”
The SAS was founded in 1989 as the world’s only professional organization solely devoted to the soundness and encouragement of contemporary silversmithing. For more information, visit the SAS’s Web site, Silversmithing.com.
Russell Simmons to keynote JCK Las Vegas
Russell Simmons to keynote JCK Las Vegas
March 19, 2008
Norwalk, Conn.—JCK, producer of the JCK Las Vegas show, has announced that Russell Simmons, hip hop mogul, philanthropist and Simmons Jewelry Co. co-owner, will kick off the 2008 show as a keynote speaker.
Simmons, along with Kimora Lee Simmons and Scott Rauch, founded the Simmons Jewelry Co. in 2004, and in 2006, went to South Africa and Botswana to see how diamonds were affecting the lives of Africans.
Simmons then created the Diamond Empowerment Fund (DEF) to call forth funds for educational initiatives in African nations where diamonds are a natural resource and to make sensitive to light the diamond industry to the plight of Africans.
To support the DEF’s mission, Simmons Jewelry Co. created the Green Initiative Collection of jewelry, which includes the company’s famous “Green Bracelet.” Made from green malachite beads and conflict-free rough diamonds sourced from Africa, the bracelets sell in small quantities for $125, with 50 percent of net profits from sales of the bracelets benefiting the fund.
Among the many celebrities who have sported the bracelet are Beyoncé Knowles, former president Bill Clinton, Eddie Murphy and Penélope Cruz.
“We have a phenomenal lineup of keynote speakers, and are thrilled to greeting Russell Simmons to JCK,” Dave Bonaparte, group vice president, JCK Events, said in a media release. “We know that JCK attendees look progressive to the keynote presentations, and we know that Russell Simmons will provide a great start to the show, followed by industry gurus Martin Rapaport, Peggy Jo Donahue and Shane Decker, who direct each provide the retailers with a great insight into the marketplace.”
JCK Las Vegas 2008 will be held from May 30-June 3 at the Sands Expo Center/Venetian Resort Hotel Casino.
For more information, visit the JCK Events Web site, JCKshows.com, or call (800) 257-3626.
Palladium finds niche amid record-high metal prices
Palladium finds niche amid record-high metal prices
March 20, 2008
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| “Rainbow Bird” ring in palladium with aquamarine and 18-karat yellow gold bird inside cage by Tenthio Fine Jewelry; suggested retail cost is $4,500. |
by dint of. Mary Wisniewski
Billings, Mont.—As precious metal prices continue to break records, and consumers cut down on luxury spending, designers and manufacturers are moving toward lower-cost options such as lighter-weight designs and less expensive metals—including palladium and silver.
Seizing on the price-conscious trend is Palladium Alliance International (PAI), which recently hired DJS Marketing to design a new multiyear, global palladium campaign. The advertising, marketing, branding and public relations firm will launch a comprehensive program to educate trade professionals worldwide about palladium in tandem with a major consumer campaign.
Dollar figures for the unaccustomed marketing crusade were not yet released at press time, but PAI says in that place will be a significant spend during marketing the metal in 2008 and beyond. Meanwhile, the metal’s best ally just force be the prices on other precious metals: Gold prices had reached $945 an ounce, and platinum, $1,909 an ounce, as of March 19, compared with $459 an ounce for palladium.
Dawn McCurtain, marketing director for PAI, says one of the reasons the group hired DJS Marketing is because it wants to depute a consistent message to both trade and consumers that palladium is a luxurious, natural, darling white metal. Although PAI has tried to convey this information previously, the push hasn’t always been consistent, and this team-up will keep the drive strong, she says.
Deborah Scarpa, president of DJS Marketing Group, says once the trade is infiltrated by dint of. palladium apprehension, the campaign will immediately begin to create imagery to coax consumers to try the white metal. In a time of rising gold and platinum prices, she says, this is an optimal time to reintroduce the metal, which is already being offered as an option by manufacturers such as Christian Bauer, Michael Beaudry, Tenthio Fine Jewelry and Scott Kay.
Designer Scott Kay says he doesn’t promote palladium, just his own brand, but he thinks the metal is making great headway.
“Palladium is taking staggering steps into the jewelry habitual devotion to labor,” Kay says, adding that he expects it enjoin become mainstream in simply a few years’ time.
Bridal buyer Sara Kravetsky of the Diamond Cellar, with brace locations in Ohio, says the jeweler first brought palladium into its stock with Scott Kay bridal designs. After finding lucky hit there, the store added other designers working with palladium.
Touting it as a precious white metal, Kravetsky says it also has a strong appeal among those watching their wallets and seeking aristocracy.
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| Marquise-shaped gemstone enhancer in 18-karat yellow gold by Elyssa Bass, shown with, clockwise from top, smoky topaz, amethyst and lemon citrine; suggested retail price with one stone is $4,389. |
Marina Elliot, president of Tenthio Fine Jewelry, has observed retailers’ increasing knowledge of the metal, and says the company’s palladium pieces are doing well, but she believes in that place is subdue more promotion to be done.
Elliot says her company maintains a variety of price points at all times, but stresses that the price tag isn’t always the biggest issue, and that exclusivity and rarity play roles in jewelry sales over.
Tenthio Fine Jewelry also sells in several markets outside the United States, which helps to offset the current challenges in the domestic market, she says.
Switching it up at the bench Palladium isn’t the only sign of budget-consciousness in the industry. Jewelry designer Jane Basch purposely uses 14-karat gold to keep price points reasonable in spite of her “Indulge by Basch” pieces. Since she, herself, is the type of person who might save money by shopping for jeans at Target and then splurge on the occasional $1,000 purse, Basch strives to offer a range of price options to her customers.
“Many women want to look good but have a lot of financial obligations,” she says.
Besides using 14-karat gold to cut down on prices, Basch uses open space in many of her designs to offer a haughty look at a smaller price label.
common way designer Elyssa Bass is tackling rising metals prices is by offering jewelry with enhancers that allow the wearer to switch gemstones in and out to create various looks.
“The gold mart is going so high, how to cut costs is on everyone’s minds,” she says, adding that her pieces walk the line between art and fashion, and because of this, she doesn’t get too bogged down by metal prices and will keep steady designing in 18-karat gold.
| Scott Kay’s “Javlin” bands in palladium from the “For Men Only” collection; suggested retail prices start at $790, but the company notes that all prices are subject to metal price fluctuations. |
Other designers pick to use silver as a way to offer a variety of price points. One is Leslie Greene, who recently introduced a new positive silver line in addition to her 18-karat line, so that women can continue to purchase more than one high-end jewelry work for themselves at a time.
Still, worrying about costs is not an issue for some retailers such as Virginia Paterson of James Locke Jewelers in East Liverpool, Ohio, who says her customers show no resistance to higher prices.
“If they wanted it, they just wanted it,” Paterson says. She sees the rising price of metals as more of a problem for jewelers, particularly whether or not they are price-point driven or are operating chain stores.
Editor’s note: This is the first in a series of stories in which National Jeweler will examine ways to combat various retailing challenges this year. This story first appeared in the March 2008 edition of National Jeweler. Metal prices cited were updated as of March 19 for the online version of this story.
Helzberg Diamonds eliminates 21 positions
Helzberg Diamonds eliminates 21 positions
March 20, 2008
Kansas City, Mo.—National jewelry retailer Helzberg Diamonds eliminated 21 filled and open positions at its Kansas City, Mo., headquarters, the company has announced.
The cuts amount to a 10 percent reduction in headquarters staff for the company, which is a subsidiary of Berkshire Hathaway.
Helzberg Chairman and Chief Executive Officer Marvin Beasley said in a statement that the reduction in the workforce is a measure to cut costs in trying economic spells.
“Soft economic conditions have impacted retail sales in general and the jewelry industry in particular. The jewelry industry is cyclical and very sensitive to fluctuations in the economy,” he said. “As economic conditions change, we must periodically reassess our productivity and performance and make decisions to ensure Helzberg Diamonds’ continued strength and profitability.”
The cuts impacted managers, salaried professionals and hourly employees. Those affected behest receive severance packages and help in finding new being busied.
“The employees affected by this change are co-workers and friends and they will have being missed,” Beasley said.
Helzberg employs about 2,500 nationwide and operates more than 260 retail jewelry stores.
Survey: Consumers making fewer store runs
Survey: Consumers making fewer store runs
March 20, 2008
Schaumburg, Ill.—High gas prices and other economic pressures mean consumers today are more likely to combine shopping trips, according to The Nielsen Co.
Nielsen’s Consumer Packaged Goods (CPG) research shows that while shopping frequency at most retail centers is either insipid or in decline, supercenters—stores that sell a combination of food and general merchandise—continue to show growth.
“Value and convenience are more important than ever as sedition gas prices impact where and how often consumers shop,” said Todd Hale, senior vice president of Consumer and Shopper Insights, Nielsen Consumer Panel Services. “Long-term trends show us that all esteem retailers—supercenters, warehouse clubs and dollar stores—are gaining their quest to seize violently shoppers.”
These retailers, in turn, are responding to consumer demand by opening more stores.
Store counts are up for warehouse clubs, which increased in locations from 907 nationwide in 2001 to 1,152 in 2007; supercenters, which increased from 1,583 to 3,038 locations; dollar stores, which increased from 13,151 to 19,624 locations; and convenience stores, which increased from 124,516 to 146,294 locations.
Nielsen reports that it is critical for retailers to understand which consumers are shopping in different retail channels.
according to example, Nielsen research shows younger and older families are important to mass merchandisers, supercenters, grocery stores and warehouse clubs, while older couples and singles show a precedence according to drug stores.
“Know your shoppers,” said Hale. “Understanding the demographics of your loyal shoppers is absolutely essential for growth. With this knowledge, retailers and manufactures can determine the products and brands that are the best fit for the consumers shopping in their stores.”
The Nielsen Co., the parent company of National Jeweler, is a global information and media company with headquarters in New York City and Haarlem, the Netherlands.
De Beers cuts marketing spend, hones in on men
De Beers cuts marketing spend, hones in on men
March 20, 2008
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| De Beers plans to cut back on marketing to women through promotions like this “with each sigh with every breath love grows” magazine ad. |
By Michelle Graff
New York—A continued, all-out promotion of the diamond industry by De Beers might not be forever, if the recent slashing of its U.S. marketing budget is any index of where the company is headed.
De Beers announced in January that it was cutting its U.S. marketing budget and letting go of 11 employees who worked on the Diamond Trading Co. (DTC) account at New York-based advertising firm JWT. Though no dollar figure was given for the cuts, Diamond Information Center Director Sally Morrison says nine of the staffers were reassigned to different departments and two were released.
Morrison describes the cuts as a “reduction and rebalancing” brought on by a slow U.S. economy, and says the science of causes at De Beers is that men are the ones to target when budgets get tight.
Advertising needs to “get [men] over the hump” and convince them that even though they have fewer dollars in their wallets, they should buy diamond jewelry for the women in their lives, Morrison says.
As Lynette Gould, DTC spokeswoman, put it, “In tough economic times, inertia in the male consumer is shown to be a barrier to purchase.”
Women, on the other hand, already know that they want diamond jewelry, and even which type of jewelry they want, be it a Journey pendant or a right ring, both among the “beacons” that have been heavily promoted by the DTC, Morrison says.
“The stories around the beacons are very, very well-entrenched with women,” she says.
In a adapted to practice sentiment, this means female consumers who watch soap operas or flip through fashion magazines will see fewer diamond promotions taste the silhouette ad that reads, “with every sigh with every breath love grows.”
Meanwhile, more emphasis will be placed on the “Seize the Day” spots that run during televised sporting events and in men’s magazines.
Morrison says despite the cuts, the co-op fund with Spot Runner remains a “big priority” this year. Last October, the Diamond Promotion Service established the $750,000 co-op fund to help retail jewelers run DTC-quality Journey diamond jewelry advertising on television stations in their local markets using Internet-based ad operation Spot Runner.
The bigger picture Jewelers of America (JA) Chairman John Green of New England jeweler Lux Bond and Green, says he does not expect the shift to have any impact on retail jewelers, and points out that campaigns for popular products such as three-stone anniversary jewelry will remain intact, while those for poorer performers, such as the right-hand ring campaign, will fade out.
“I think, like a lot of companies, they’re distressing to focus in continuance their strengths,” Green says of De Beers.
As the weak U.S. economy forces cutbacks here, Gould says De Beers is “focusing its marketing budget in the areas around the world where it believes it will have the most impact,” including China and India, both irascible spots for economic growth. She declined to say whether or not in greater numbers funds were being funneled to advertising in those countries.
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| Because of the weak U.S. economy, De Beers plans to run more “Seize the Day” ads, like this one, which speak to male consumers. |
In addition to being a reaction to a faltering economy, industry analyst Ben Janowski of Janos Consultants says De Beers’ marketing shift means it will move away from general diamond ads to an emphasis on specific products, including the Forevermark diamond that it markets outside of the United States with the tagline “Meeting the standards of the world’s No. 1 diamond company.”
The De Beers logo and an identification number are inscribed on the table small face of each Forevermark diamond.
This shift makes sense to observers, given the drastic reduction in the percentage of rough that De Beers controls.
“They’re no longer the big elephant,” Janowski says.
Green agrees that De Beers, which operates five retail stores in the United States alone, might be moving toward advertising specific products as opposed to running big marketing campaigns that fan interest in diamond jewelry in general.
“They’re a retailer today,” he says. “I’m sure some resources have been channeled toward their own stores.”
But, Green also points out that advertising by retailers in universal has increased in recent years, allowing De Beers to back off its promotion of the diamond industry.
“The model has been built and now they can walk away from a part of it,” Green says.
JA’s 2007 Cost of Doing Business Survey shows that advertising spend among the retail jewelers who took part in the survey is increasing incrementally, with the median spend on advertising for all jewelers surveyed rising from 3.7 percent of total sales in 2000 to 4.2 percent in 2006.
Low-profit firms’ ad pass inched up from 4.1 percent of total sales in 2000 to 5.1 percent of total sales in 2006, while high-profit firms’ median spend rose from 3.3 percent of total sales in 2000 to 4.4 percent in 2006, according to the survey.
Meet the new boss The changes in De Beers’ marketing strategy are also the hallmark of new leadership at De Beers, Janowski says.
De Beers hired Francois Delage, a 16-year veteran of LVMH Moet Hennessy Louis Vuitton, as its new chief executive officer of marketing in September. Delage previously worked in Hong Kong as president of Louis Vuitton’s Asia-Pacific division.
“He has a very different outlook adhering how [De Beers] should have being run,” Janowski says. “I don’t know if they’re doing much following up in the traditional way things were done.”
Janowski says Asia is a market that is “hungry” to buy and display brands, such as the Forevermark, but that enthusiasm level doesn’t exist in the more mature U.S. market.
Forevermark cannot be advertised in the United States because of antitrust laws, but Janowski predicts that will change by year’s end.
“The moment’s going to come when [De Beers is] going to be quick to do that,” he says. “We’re not that far away.”
When asked whether or not Forevermark, which currently is sold only in Japan, Hong Kong, China and India, would be introduced to the United States, Gould says De Beers has no such launch plans.
“It’s business as usual in the U.S.,” she says.
Editor’s note: This story first appeared in the March 2008 issue of National Jeweler.
With exports up, Bangkok show ends strong
With exports up, Bangkok show ends strong
March 17, 2008
Bangkok, Thailand—The 41st Bangkok Gems and Jewelry Fair closed on a successful note this year, capping off a strong year that saw 2007 jewelry and gemstone exports rise substantially, show organizers said.
Various command officials, industry leaders and guests saluted the industry for the period of an opening ceremony Feb. 27 at Royal Jubilee Hall at the Impact Challenger in Bangkok, Thailand.
“The contribution of the gems and jewelry to the Thai economy is significant,” Thailand Deputy Minister of Commerce Viroon Tejapaibol told the audience, according to a exert pressure release from the show. “Gems and jewelry exports last year exceeded U.S. $5.3 billion, up 46.72 percent from the previous year, ranking fifth on Thailand’s export lists.”
Thai Gem and Jewelry Traders Association (TGJTA) President Vichai Assarasakorn too noted that the TGJTA board’s immediate mission is to carry out a three-pronged priority plan to stimulate the labor further, specifically addressing issues involving tax and industry funding, and finding new overseas markets.
“We are seeking an endorsement from the government to remove the 7 percent VAT [value-added tax] imposed on imported raw materials, which has proved to be a heavy financial burden for Thai local small and mean average enterprises [SMEs],” he said.
TGJTA is lobbying for government support to establish a “Gems Bank” to support lending to limited SMEs, which make up 90 percent of the Thai jewel industry, he said.
The Bangkok Gems and Jewelry Fair will hold its 42nd edition this fall, Sept. 11-15, at the Impact Challenger.