Jewelry Sales Stay Even for 2002

October 13, 2003

Jewelry Sales Stay Even for 2002

Jewelers of America's annual Cost of Doing Business Survey shows JA members completing the survey reported 0% annual sales increases in 2002 from 2001 – the second year in a row jewelers experienced no sales growth. This compares to a 3.3% increase in 2000 and the 10.5% increase achieved in 1999.

Jewelers' Sales by Store Type
Not all JA members are growing at the same rate. Median sales ranged from -6.9% to +10.1%. Looking at the various types of jewelers studied, chains and jewelers designated as designer/artist/custom enjoyed sales increases. Chains overall were up 6.1%, while designer jewelers' sales rose 9.1% overall. However, designer jewelers' sales in 2001 were down 12.5%, which should be considered in light of their dramatic rise in 2002. Chains had been up 3.2% in 2001, which makes their 6.1% rise in 2002 an even better gain. In fact, chains have been the only category to experience sales rises in both 2001 and 2002.

Independent high-end jewelers saw sales decline 2.7%, an even bigger hit than last year, when their sales declines 0.3%. Independent middle-range jewelers' sales overall decreased 0.2%, while last year their sales had stayed even with the year before.

Category Winners
Diamond jewelry and loose diamonds continue to represent the largest category of sales for JA member jewelers – nearly half of all sales – with diamond jewelry commanding 34% of sales and loose diamonds bringing in 13%. Though marketers continue to champion branded diamond jewelry for its added value, loose diamond sales actually increased slightly over the year before, while diamond jewelry sales decreased.

For the second year in a row, the decline in sales of watches stabilized, as timepieces held on to 5% of sales in jewelry stores. Colored gemstone jewelry sales also stayed constant at 9%. Karat gold jewelry sales declined slightly, from 11% of total sales in 2001 to 10% in 2002.

Jewelers' profitability slipped for the second year in a row, from 6.1% in 2001 to 4.2% in 2002 (as measured by the median). However, jewelers were able to maintain higher gross margin levels than in previous years. This has been important to achieving even the reduced profitability the industry had, according to the survey. Once again, chains and designer jewelers were the winners among the four types of stores studied, with chains achieving 52.6% gross margins and designers notching 57.6% gross margins. Independent high-end jewelers saw margins of 46.9% while independent mid-range stores achieved 49.8% margins.

The Respondents
Response to the JA Cost of Doing Business Survey has generally been stable over the last several years – with this year's being the fourth best ever. A broad cross-section of businesses from across the country responded. Independent mid-range jewelers were the biggest responders, with almost 63% of results from them. Independent high-end jewelers constituted 25% of respondents, designers were 7% and chains were almost 4%.

Downtown merchants represented the largest group of respondents at 36%, while strip malls constituted almost 33% of responses. But given the number of stores chains have, the sample actually covers more mall stores than non-mall-based jewelers. Most respondents rent their stores, though independents are most likely to have made the investment in purchasing their locations.

Key Facts
A substantial 80.5% of JA member jewelers are making their own jewelry, with a few making all the jewelry they sell. Median sales of "made" versus "puchased" jewelry approximate 10%. Also worth noting is that while jewelers went through a period of growth in the use of the Internet, that growth leveled off in 2002.

The JA Cost of Doing Business Survey is published each fall and offers retail jewelers comprehensive financial information to help them evaluate and compare their store's performance to others in the industry. The survey is also used by banks, accountants, consultants and marketers as a yearly snapshot of retail jewelry store performance.

The survey is based upon confidential questionnaires submitted by hundreds of JA members. It looks at many key performance measures. The study's format, scope and content are similar in each annual edition, making it easy to compare year-to-year data.

The 2003 Cost of Doing Business Survey, now in print, is available to JA member retailers for $19.95. The survey is $125 to non-members. JA members who contribute to the data by completing questionnaires receive one free copy. For information on participating in the survey or ordering it, contact JA at (800) 223-0673 or visit

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