May 2008

Study: Consumer spending lowest since 2001

Study: Consumer spending lowest since 2001
May 22, 2008
_{Current economic downturn ’significant’ since hold out recession}

New York—With house prices falling nearly 12 percent in March and unemployment claims increasing 9.8 percent in the same period, consumer spending has reached its lowest level since 2001, according to the Deloitte Research Leading Index of Consumer Spending.

“This significant drop in the index gives us empirical data of what many have long suspected,” Carl Steidtmann, supreme economist with Deloitte Research and author of the monthly index, said in a media release. “The current economic downturn is as significant as anything we have seen since the last recession.”

The Deloitte Research Leading Index of Consumer Spending tracks consumer cash flow as every indicator of future consumer spending. The index comprises four components: tax burden, initial unemployment claims, real wages and real home prices, which decreased to 1.3 percent from a revised gain of 1.51 percent in February.

“With federal income tax rebate checks now hitting consumers’ pocketbooks, retailers are aggressively courting consumers to get their share of those dollars,” Stacy Janiak, the U.S. retail sector leader at Deloitte, said in the release. “It is a full-fledged battle right now that is only going to get more fierce as gas prices continue to rise toward their typical Memorial Day peak. Retailers are expected to offer substantive incentives beneficial to rebate check prescription and find creative ways to merchandise the shelves and attract the consumer, who is increasingly focused on buying just the basics.”

Highlights of the latest index include:

—Tax burden: The tax burden is expected to continue to fall with slowing income growth. This remains the alone positive factor supporting consumer spending in the months ahead.

—Initial unemployment claims: Unemployment claims increased 16.1 percent in March compared with last year.

—Real Wages: Real-wage growth was negative. The decrease was marginally lower compared with the previous month. This comes at a time when personal income increased 4.4 percent in the elementary have lodgings of 2008 compared with a year ago. Rising food and energy prices continue to be a concern for consumer spending.

—Real home prices: The descent in house prices intensified further, decreasing nearly 12 percent compared with a year ago. The home market shows no sign of bottoming out, with residential spending falling 26.7 percent in the first divide of 2008 versus the first place of 2007.

For more information about Deloitte’s Retail group, visit the company’s Web position, Deloitte.com.

Mid June auction set for OTC

Mid June auction set for OTC
May 22, 2008
_{Bankrupt jewelry importer, wholesaler to sell assets}

New York—An auction for the assets of bankrupt jewelry importer and wholesaler OTC International Ltd. is scheduled for June 17, according to court documents filed earlier this week.

OTC already has entered into a sale agreement with loose-diamond importer and manufacturer Dialuck Corp., which has offered $23 million for the business, plus the assumption of certain liabilities.

But a higher bid would outweigh the sale agreement.

According to court documents, each bid for “substantially all the assets, as well as the assumption and assignment of the executor contracts, must be for an amount equal to or greater than the purchase cost plus $750,000.”

In addition, “each proffer for one or more categories of assets…must be in each amount equal to or greater than the reserve price,” court documents state.

The reserve prices, according to court documents, include: $3 million for OTC business and memo, $10 million on the side of the jewelry inventory and $3 million for loose diamonds.

The deadline for bids is 4 p.m. on June 10.

The auction, as of now, is scheduled for 10 a.m. at the New York law offices of Nixon Peabody LLP, court papers state.

OTC filed for Chapter 11 bankruptcy protection on April 3, amid mounting financial losses.

According to court documents, for the fiscal year ended Feb. 28, 2007, OTC generated gross revenues of $97.5 million and net income of $566,000.

But business started going southward for the importer around November 2007. For the fiscal year ended Feb. 28, 2008, the company generated gross revenues of about $85 million, with net operating losses of about $15 the great body of the people, court papers show.

OTC imports and wholesales gold, silver, diamond, cameo and colored-stone jewelry to retail chains, major departments stores, e-tailers, discount chains and specialty stores.

Court documents show that the bulk of OTC’s business is in gold and diamond jewelry, and that its sells the greatest percentage of its merchandise to e-tailers.

Retailer Hall of Fame inductees announced

Retailer Hall of Fame inductees announced
May 22, 2008

New York—The inductees instead of the 20th annual National Jeweler Retailer Hall of Fame, an honor for jewelers who have made significant contributions in jewelry retailing, wish been announced.

Al Molina of Molina Jewelers in Phoenix is the winner in the single-store independent category, while Michael Pollock of Hyde Park Jewelers takes honors in the multi-independent category, and Marvin Beasley, of North Kansas City, Mo.-based Helzberg Diamond Shops Inc., is the winner in the majors category.

Molina opened Molina Jewelers in Phoenix in September 1987. The store is a retailer of fine gold, watches, diamond and colored-stone jewelry, and also does jewelry and pocket timepiece repairs.

Hyde Park Jewelers has been serving the Denver area for more than 25 years, with its current Denver store located at Cherry Creek Mall.

In addition, Hyde Park has stores in Phoenix, which opened in November 2003, and Las Vegas, which opened in August 1997.

Morris Helzberg opened the first Helzberg store in Kansas City, Mo., in 1919.

Today, the company has 270 stores nationwide and is part of Warren Buffett’s Berkshire Hathaway Inc.

A panel of jewelry-retailing peers selected each class of Hall of Fame winners, and National Jeweler will side face each in a special supplement to the magazine, slated for August.

In addition, the winners will be honored at the National Jeweler Retailer Hall of Fame dinner, scheduled for 6 p.m. on July 26 at the Mandarin Oriental, 80 Columbus Circle at 60th Street in Manhattan.