Jewelry Store Sales Rise in 2003
Part 1 of our three-part series on the Cost of Doing Business Survey looks at the first sales growth reported in three years
The light at the end of the tunnel seems about 4.4% brighter than its been in a few years. Thats the percentage of sales growth Jewelers of America members reported for 2003 in the newly published 2004 Cost of Doing Business Survey, produced by JA and Professional Jeweler. The increase follows two years of zero sales growth.
Looking at sales growth by store type, increases ranged from 10% for chain stores (up from 6.1% the previous year) to 1.5% for designer/artist/custom stores (down from 9.1%). In the middle were independent high-end stores with 6.7% growth (up from a 2.7% drop) and independent midrange companies with 4.1% (up from a 0.2% drop).
Though more consumers are buying diamonds via nontraditional channels, diamonds still comprise the largest share of products for JA members: 34.2% for diamond jewelry (unchanged) and 12% for loose diamonds (down from 13%).
The next-largest categories were colored stone jewelry and karat gold jewelry at 9.1% each and repairs at 9%.
OK, sales are one thing. Profits are another. Net profits rose slightly from 4.2% to 4.5%. Gross margins were essentially unchanged at 48.8%. By store type, gross margins played in a very narrow range, from 46.1% for independent high-end companies (down from 46.9%) to 50.1% for independent midrange companies (up from 49.8%). In the middle were designer/artist/custom companies at 48.4% (down significantly from 57.6%) and chains at 49.2% (down from 52.6%).
The Jewelers of America/Professional Jeweler Cost of Doing Business Survey is published each fall and offers comprehensive financial information to help retail jewelers evaluate and compare their stores performance with others. Its based on con- fidential questionnaires submit-ted by hundreds of JA members. It looks at many key performance measures.
The 2004 Cost of Doing Business Survey is available to JA member retailers for $19.95 and to non-members for $125. JA members who participate in the survey receive one free copy. For information on participating in the next survey or to order the current edition, call JA at (800) 223-0673 or visit www.jewelers.org. You also may order the survey at www.professionaljeweler.com or by using the order form on page 82 of this issue.
by Ren Miller