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Consumer Confidence Up

By Rapaport
Consumer Confidence Up

The Conference Board Consumer Confidence Index® increased to 63.3 in May 2010 from 57.7 in April, its third consecutive monthly gain. Lynn Franco, the director of the Conference Board Consumer Research Center, commented that the Index “appears to be gaining some traction.”

Consumers saying conditions are “good” increased to 10 percent from 8.9 percent, while those describing business conditions as “bad” declined to 39.3 percent from 40 percent. The Consumer Confidence Survey® is based on a representative sample of 5,000 U.S. households. The cutoff date for May’s preliminary results was May 18.

Tiffany’s Sales Grow

Tiffany & Co.’s sales increased by 22 percent year over year to $633.6 million during the three months that ended on April 30, 2010, while its comparable-store sale rose 14 percent worldwide compared with one year ago. Tiffany recorded growth in all regions except Japan, with its sales in the Americas jumping 22 percent year over year to $315.3 million and its New York flagship store sales up 26 percent. Sales in the Asia Pacific region increased by 50 percent to $122.3 million, while in Japan, they fell 2 percent to $115 million. Sales in Europe grew 25 percent to $68.6 million.

Other sales, including wholesale sales of rough diamonds, increased by 151 percent to $12.3 million, based on an increase in both the company’s rough diamond sales and the merchandise it sold to independent distributors during the quarter. The company expects sales to increase by 11 percent overall in 2010.

Signet’s Profits Surge

Profits for Signet Group, the world’s largest specialty retail jeweler, grew 98 percent year on year to $52 million as sales increased 6.2 percent to $810 million for the first fiscal quarter of 2011 that ended on May 1, 2010. Same-store sales rose 5.8 percent and total inventory dropped 15 percent to $1.1 billion. Net cash as of May 1, 2010, stood at $170.8 million and net debt stood at $276.3 million.

Sales at Sterling Jewelers, Signet’s U.S. division, climbed by 6.8 percent compared with one year ago to $667.1 million and same store sales rose 7.2 percent. The average unit-selling price rose 5 percent to $380, excluding charm bracelets. Jared® The Galleria of Jewelry’s average unit selling price rose 3 percent to $741 and Kay Jeweler’s unit price was up 6 percent to $322, with both figures excluding charm bracelets. Signet reported that it planned to close 43 stores in the U.S. and open eight by the end of this fiscal year. U.K. division sales rose 4 percent to $142.9 million, while same-store sales were essentially flat, dropping just 0.2 percent.

Sotheby’s Revenues Jump

Sotheby’s revenues rose by 87 percent year over year to $101.9 million as its expenses fell by 15 percent to $94 million for the quarter that ended on March 31, 2010. The auction house reported a net loss of $2.2 million compared with the loss of $34.5 million it posted for the comparable period of 2009. Bill Ruprecht, the president of Sotheby’s, cited “the renewed art market momentum” and a decrease in operating expenses as the causes.

Finlay Reports Loss

Finlay Enterprises posted a net loss of $2.4 million in March 2010, according to the 8-K form it filed with the U.S. Securities and Exchange Commission (SEC) on May 3. The jewelry retailer, which filed for Chapter 11 in August 2009, collected cash from liquidation sales totaling $12.2 million during March 2010. No new revenues were recorded for this month.

Since filing for bankruptcy protection, Finlay has collected cash from sales of $157.5 million, while its revenues from new merchandise sales have totaled $273.9 million. It has operated at a net loss of $97.7 million since August 2009.

Birks & Mayors’ Sales Increase

Birks & Mayors reported that its sales grew 29 percent year over year to $63.6 million during the fourth quarter that ended on March 27, 2010. The jewelry retailer’s comparable-store sales increased by 18 percent, with U.S. store sales up 19 percent and Canada store sales reflecting a 17 percent increase.

For the fiscal year, Birks & Mayors’ sales fell 6 percent to $255.1 million, with comparable-store sales down 6 percent. Comparable-store sales in the U.S. dropped 12 percent, while in Canada, they decreased by just 1 percent. The company expects to report its full earnings in early July. It has already forecasted a net loss of between $18 million and $20 million for the year.

Jewelry Sales Boost Berkshire Hathaway’s Retail BusinessBerkshire Hathaway’s retail segment attributed a first-quarter revenue increase of 3 percent to $675 million primarily to its jewelry businesses. The retail unit consists of four home-furnishing businesses, See’s Candies and three jewelry firms: Borsheim’s Jewelry, Helzberg Diamonds and Ben Bridge Jeweler. Their combined pretax retail earnings doubled from the first quarter of 2009 to total $32 million for the quarter that ended on March 31, 2010.

Berkshire Hathaway’s jewelry revenues fell by 12 percent for the full fiscal year of 2009. The company did not provide separate data for each retail business.

Bulgari Trims Losses

Bulgari Group posted a net loss of $10.6 million (EUR 8.3 million) for the three months that ended on March 31, 2010, an improvement from the previous year’s loss of $37.3 million (EUR 29.3 million). The company’s revenues increased 12 percent year on year to $253.4 million (EUR 199.1 million) as its jewelry sales gained by 10.6 percent to $112.2 million (EUR 88.2 million). Watch sales dropped 1.4 percent to $52.8 million (EUR 41.5 million). Francesco Trapani, Bulgari’s chief executive officer (CEO), said that watch and jewelry orders at Baselworld in March 2010 increased by 60 percent compared with 2009.

Sales growth was strongest in the Americas, jumping 40.5 percent for the quarter. Asian sales, including in Japan, rose 13 percent, while European sales grew by 5.6 percent and Middle East sales increased by 6.4 percent. The group lowered its operating costs by 7 percent and reduced its advertising and promotional expenses by 9 percent during the three-month period.

U.S. Online Retail Sales Improve

Retail ecommerce registered 10 percent growth in the U.S. at $34 billion during the first quarter of 2010, online sales metrics firm comScore reported. The double-digit increase, the first since the second quarter of 2008, did not include online spending for travel, revenue from auctions, automobile purchases or large corporate expenditures during the period, which ended on March 31, 2010.

The growth was driven by upper-income consumers, with spending by households earning $100,000 and more increasing by 14 percent. “Pureplay,” or online-only, retailers continued to gain ecommerce spending market share from multichannel retailers, comScore found.

Blue Nile’s Sales Climb

Blue Nile’s sales improved 19 percent to $74.1 million during the quarter that ended on April 4, 2010, compared with the 11 percent drop it posted one year ago. The etailer’s net income for the quarter improved by 23 percent year over year to $2.4 million.

Sales in the U.S. totaled $64.5 million, a year-over-year increase of 14 percent, and international sales grew by 71 percent to $9.6 million. Excluding the impact of foreign exchange rate changes, however, international sales increased by just 52 percent.

Growth was reported across all price ranges, but was strongest in price points above $25,000. At the end of the quarter, cash and cash equivalents totaled $47.2 million.

Bidz.com’s Revenues Fall

Bidz.com reported that its revenues slipped 10 percent to $28.2 million in the quarter that ended on March 31, 2010. Even though it kept its costs in check at $21 million, the auction website posted a net loss of $111,000 for the quarter compared with profits of $1.5 million one year ago.

The company held $7.8 million in cash at the end of the quarter, with no long-term debt. Bidz.com reduced its inventory by $9.8 million during the three-month period. The company recorded a 5 percent annual increase in its average selling price to $190 per order and the number of items sold per transaction rose to 4.1 from 3.

Article from the Rapaport Magazine - June 2010. To subscribe click here.

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