October 14, 2005
Jared Grows; Bailey Banks & Biddle Shrinks
The two biggest jewelry retailers in America have announced divergent directions for two of their key brands. Sterling Jewelers' Jared the Galleria of Jewelry off-mall destination brand will grow significantly while Zale Corp.'s Bailey Banks & Biddle guild store brand is set to become more exclusive through a shrinking number of stores.
Jared the Galleria of Jewelry
As Jared announced its 100th store opening in Waldorf, MD, its parent company spoke about future growth. "In the past five years, the number of Jared stores has more than tripled," says Terry Burman, chairman and CEO of Sterling Jewelers. "It is our intention to increase the number of Jared store openings from 12-15 to 15-20 annually." Jared is Sterling's fastest growing brand.
Burman says the off-mall destination concept has considerable growth potential. Sterling has identified more than 100 suitable markets for the Jared concept, it says, many of which can support multiple locations. "Based on the current performance of existing Jared stores, there is the capability in the longer term to expand nationwide to over 225 stores," says Burman.
The Jared brand features five times the selection of a typical mall store, high-level customer service, children's play areas, refreshments, and low prices. Sterling says a national television advertising program is also in the works for Jared, in part to facilitate its entry into new markets. Jared stores are currently located in 23 states.
Bailey Banks & Biddle
Zale Corp. plans to close 30-35 Bailey Banks & Biddle stores over the next year or so. It now has 104 units. Ken Gassman, industry analyst for Idex Online, points out that Zale Chairman Mary Forte also commented recently that if BBB were "right-sized," it might be a chain of 50 stores or so. "If that's so," says Gassman, "then there are another 20-25 stores which will be closed" in the future.
The analyst says BBB is closing its stores to increase differentiation among its various brands (there was criticism that some low-end BBB units looked too much like Zales stores), and to ensure that all BBB stores better match the "guild store" message as expressed by the brand's year-old Houston Galleria location, which is larger and more upscale. New BBB locations will look more like this prototype.
Gassman says Zale management is reinforcing the notion that BBB is a luxury brand. "By reducing the number of stores, BBB will automatically become a more 'exclusive' brand like Tiffany & Co., Harry Winston, and other luxury jewelers which aren't trying to flood the market with stores," he says. There will be fewer BBB stores in markets with multiple units now, and BBB is also raising its average ticket price, which is currently $1,502, up 13% from the prior year's $1,325.
"Bailey Banks & Biddle is well on its way to a successful repositioning," says Gassman. "The high-end market is growing much more rapidly tha either the popular-priced market segment or the mass-market segment, a trend which is expected to continue."
by Peggy Jo Donahue