Jewelry Retail Growth Flat in 2007, JA Report Says
July 30, 08
Overall growth among jewelry retailers was essentially flat for the first time since 2001 and 2002, Jewelers of America (JA) found in its annual Cost of Doing Business Survey. Growth declined 0.3 percent on average, down from 4.1 percent in 2006.
JA members saw mixed results in 2007, with mid-range independents noting declines and higher-end independents growing 3.5 percent.
Designer/custom retailers fared best with a 6.1 percent sales increase over 2006. Independent high-end retailers saw growth of 3.5 percent, but that was down from 2006, when the category was up 7.4 percent. Chain stores experienced 2.5 percent sales growth, while mid-range retailers were down 1.7 percent compared to 2006.
The distribution of sales remained consistent from year to year. Diamonds (loose and set) remained the majority, making up 52 percent of sales, up 2 percent from 2006. Colored stone jewelry followed with 10 percent of sales and gold jewelry, 8 percent. Repair sales continue to be important, bringing in 11 percent of sales, while sales of timepieces declined from 4 to 3 percent of sales, compared to 2006.
Although higher profit entities had lower sales per store, they had higher sales per full-time employee, with lower payroll and operating expenses and a 20 percent greater inventory turnover than their low-profit counterparts.
“It is clear that high-profit jewelers do many things just a little better than their low-profit competition,” says IDEX Online analyst Ken Gassman, commissioned this year by JA for a supplementary analysis of the survey.
Gassman observes that while financial results for 2007 were less robust, the business is cyclical. “It wasn’t a bad year in 2007; rather, it was clear that the industry hit its ‘high water’ mark in 2006, and the tide began to recede in 2007, a trend that continues today.”
The 2008 Cost of Doing Business Survey analyzes member stores’ financial data from 2007, from a cross section of jewelers, including independent high-end firms (22.6%), independent mid-range firms (36.5%), jewelry chains (7%) and designer/custom jewelers (11.8%).