RAPAPORT...
U.S. Gold Jewelry Sales Excel
Gold jewelry retail sales in the United States improved 6 percent in 2006, which was the strongest growth rate achieved since 1999 and the sixteenth year in a row that U.S. gold jewelry sales have increased, a survey conducted by GfK Audits & Surveys and sponsored by the World Gold Council (WGC) showed. Despite industry concerns over the rising price of gold, enhanced marketing and the growing fashion trend toward yellow gold boosted consumer demand, contended the WGC.
The council — a commercially-driven marketing organization funded by the world’s leading gold producers — pointed out that gold jewelry sales were strong across multiple distribution channels, including traditional jewelry stores as well as department stores. The complete 2006 annual U.S. Gold Jewelry Sales report will be available in May 2007. All data contained in the document is based on a retail market audit derived from the sales results of more than 7,500 stores encompassing major gold jewelry distribution channels.
Tiffany’s 2006 Sales Hit $2.6 BillionTiffany & Company’s net sales in the fourth quarter and fiscal year (FY) ended January 31, 2007, increased 15 percent to $986.35 million and 11 percent to $2.64 billion, respectively. These performances culminated in roughly flat net earnings results for both the three-month and FY periods — at $140.49 million and $253.92 million, respectively. In addition, the group’s comparable store sales were up 9 percent and 6 percent for the quarter and FY, respectively.
The jeweler and specialty retailer experienced a 32-percent rise in same store sales for the fourth quarter across Europe and a 26-percent lift in the Asia Pacific region, excluding Japan, which fell 5 percent. In addition, sales in the United States, Tiffany’s most robust marketplace, grew 13 percent to $506.93 million in the fourth quarter and 9 percent to $1.32 billion for the FY. Chairman and Chief Executive Officer Michael J. Kowalski said Tiffany expects to open 17 new Tiffany & Co. stores and boutiques in 2007, adding to the 167 existing stores.
Federated To Become Macy’sFederated Department Stores will trade on the New York Stock Exchange under the ticker symbol “M” for Macy’s beginning June 1, 2007. The move assumes that Federated shareholders will approve a corporate name change to Macy’s Inc. on May 18, 2007. Federated’s shares have traded as FD since 1992.
Terry J. Lundgren, Federated’s chairman, president and chief executive officer, said: “Macy’s and Bloomingdale’s are leading brands known worldwide. Changing the parent company name to Macy’s Inc., while trading our shares under the M ticker symbol, will make it simple and clear for all investors to understand we are a brand-driven and consumer-oriented company.” He pointed out that Macy’s represents about 90 percent of the revenue of the corporation, “and this is another important opportunity to reinforce the recent expansion of the Macy's brand.”
H.K. Retail Sales DownRetail sales in Hong Kong fell 1.3 percent in January 2007 to $HK21 billion ($2.8 billion). Hong Kong’s Census and Statistics Department (CSD) attributed the easing in retail sales to the timing of the Chinese New Year, which occurred in February 2007. Despite this, jewelry sales still rose 10.5 percent, as did luxury goods, CSD figures showed. In addition, motor vehicles and parts sales advanced 23.5 percent during January; however, department store sales declined across the board. Comparisons are with January 2006.
Singapore Jewelry Sales WeakerSingapore retail sales were dragged down in January 2007 by weaker performances in jewelry, recreational goods and computers. Overall retail sales dipped 1.8 percent to $1.8 billion when compared with January 2006, but the Singapore government pointed out that they fell 3 percent when compared with the preceding month, December 2006. Sales of jewelry declined more than 20 percent, as did those of recreational goods and computers, reported the government’s statistics department. It concluded that sales in December 2006 were particularly strong.
J.C. Penney Sales Near $20 BillionJ.C. Penney Company’s net sales for the fourth quarter of its latest completed fiscal year (FY) finished 7.4 percent ahead of where they did at the same time last year. They reached $6.7 billion for the fourth quarter, which ended February 3, 2007, although group profits slipped 13.4 percent to $447 million. For the full FY, which covered 53 weeks, J.C. Penney registered total sales of $19.9 billion and profits of $1.15 billion, which represented growth rates of 6 percent in both cases. Comparisons are with the previous corresponding periods. The company reported good demand for fine jewelry during the fourth quarter with the better performances by region having come from the northeastern and Pacific Coast states.
Neiman Marcus Profits LeapNeiman Marcus delivered increases of 6.8 percent and 9.2 percent to $1.3 billion in same-store and overall sales, respectively, for the second quarter of its fiscal year (FY). Group net earnings for the quarter, which ended January 27, 2007, were even more impressive, soaring almost 14-fold from $3 million to $41 million. For the first half of the FY, Neiman Marcus reported total sales had risen 9.3 percent to $2.34 billion and same-store sales by 6.8 percent. Net earnings had gained 17.6 percent to $68.3 million. Comparisons are with the previous corresponding periods.
Solid Sales Growth For SaksSaks Incorporated realized comparable-store and overall sales growth of 9.9 percent and 16.8 percent to $955 million, respectively, for the fourth quarter of its latest completed fiscal year (FY). The group’s net income for the fourth quarter, which ended February 3, 2007, recovered to $21.5 million, versus a loss of $2.2 million for the fourth quarter last year. For the full FY, which included an extra week, Saks posted net sales of $2.94 billion and profits of $53.7 million, up 5.8 percent and 141 percent, respectively. Comparisons are with the previous corresponding periods.
Abazias Sales UpIt’s been an encouraging couple of months for online diamond retailer Abazias, which reported that sales jumped 81 percent in February 2007 to $680,000 and that it had sold a 5-carat, G color, VS1 clarity diamond for $160,000 in mid-March. Chief Executive Officer Oscar Rodriguez attributed increased sales in the first quarter to the Valentine’s Day period in particular and to the website’s new proprietary 3D ring builder. The company’s sales rose 58 percent during 2006 to $4.8 million, reducing the loss for its latest completed fiscal year by 68 percent to $139,613. Comparisons are with 2005 and February 2006.
Meantime, Abazias recently initiated a formal process to explore a variety of strategic alternatives to enhance shareholder value, including a possible sale of the company. It has retained Cantor Fitzgerald to act as an exclusive financial adviser examining a range of potential short- and long-term options. Abazias, which recently completed a stock split and changed its stock symbol to ABZA, pointed out that engaging the investment bankers would not necessarily result in any transaction or an altering of its current strategy. “[Abazias] does not intend to disclose developments with respect to any outcome of the process unless and until a specific transaction is approved or otherwise has reached a definitive conclusion,” the company advised in a statement.
Fuel Powers Japan Retail SalesJapan’s retail sales inched up by 0.2 percent in 2006 from the previous year to ¥129.77 trillion ($1.07 trillion). Fuel sales were a key driver with a 7.3 percent increase, while sales of pharmaceuticals and cosmetics were up 0.8 percent, a preliminary report from Japan’s Ministry of Economy, Trade and Industry showed. However, sales of many other items decreased, including automobiles, home appliances and clothing. Overall sales by large supermarkets and department stores dropped 0.9 percent, while auto sales eased 0.6 percent, hit by slumping sales of compact cars and used vehicles.
Jewelry Stock Index| Company | 03/26/07 | 02/20/07 | % Change |
| Blue Nile | 41.03 | 38.80 | 6% |
| Finlay Enterprises | 7.09 | 9.50 | -25% |
| House of Taylor Jewelry | 2.95 | 3.49 | -15% |
| Lazare Kaplan Intl. | 8.07 | 9.71 | -17% |
| Signet Group | 23.75 | 23.83 | 0% |
| Tiffany & Company | 45.63 | 42.94 | 6% |
| Zale | 26.16 | 29.96 | -13% |
Article from the Rapaport Magazine - April 2007. To subscribe click here.