The consumer price index (CPI) for jewelry in the U.S. totaled 157.4 points in July 2010, compared with the 156.75 points posted for July 2009, according to statistics provided by the Bureau of Labor Statistics (BLS). Although the jewelry CPI was down slightly, falling after three consecutive months of readings that were 160 points or higher, it nonetheless marked the 30th consecutive cycle that registered over 150 points. The jewelry price index is based on the reference point of average prices in 1986, which is set at 100 points.
U.S. July Retail Sales Increase
MasterCard Advisors’ SpendingPulse, a macroeconomic report that tracks national retail and service sales, revealed that sales, excluding in the automobile sector, grew by 1.4 percent year on year in July. On a seasonally adjusted basis, month-to-month sales declined by 0.9 percent.
July’s retail growth rate, again excluding auto and gasoline sales, reflected a year-to-year gain of just 1 percent, well below the 3.5 percent posed for the previous three months. SpendingPulse noted strength in e-commerce, airline, lodging, electronics and appliances, while spending in apparel, jewelry and luxury underperformed.
U.S. chain-store sales rose 2.3 percent year on year for the week that ended on August 21, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs, a less robust increase than those recorded over the past two months.
Signet’s Revenue Rises
Signet’s revenue rose 1.7 percent year on year to $722.8 million during its second quarter of fiscal 2011 that ended on July 31, 2010. The retailer’s net income gained by 47 percent to $40.7 million, while its U.S. division sales were up 5.1 percent to $580.8 million and its U.S. same-store sales rose 5.9 percent.
Signet’s chief executive officer (CEO),Terry Burman, said the company increased its target range for free cash flow by $75 million to fall between $225 million and $275 million for fiscal 2011 and noted that the outlook for fiscal 2011 is uncertain.
Finlay Reports Loss
Finlay Enterprises filed its monthly balance sheet with the U.S. Bankruptcy Court, Southern District of New York, for the month of June 2010, reporting that it had not made any additional sales. The company also reported a monthly operating loss of $266,000 and total reorganization expenses of $799,800. Since Finlay filed for bankruptcy in August 2009, the cumulative revenue from its merchandise and repair sales has totaled $278 million.
Sotheby’s Report Strong Growth
Sotheby’s boosted its revenue by 68 percent year over year to $281.4 million during the second quarter that ended on June 30. The auction house kept expenses to $141.7 million, a positive gain of 19 percent. Operating income jumped 192 percent year on year to $139.7 million, while profit rose from $12.2 million for the second quarter of 2009 to $86.2 million.
Jewelry Sales Lead Bulgari to Profit
Bulgari Group reported a small profit in the second quarter of 2010, with its jewelry business helping to spur the turnaround. The Italy-based company posted a net profit of $793,000 (EUR 600,000) for the three months that ended on June 30, compared with a loss of $14.8 million (EUR 11.2 million) for the same period of last year. Group revenues rose 12 percent year over year to $322.7 million (EUR 244.2 million). Jewelry sales accounted for 47 percent of this revenue, growing 18 percent to $151.2 million (EUR 114.4 million).
Blue Nile’s Sales Up, Profits Flat
Blue Nile’s sales rose nearly 10 percent year on year to $76.6 million during the second quarter that ended on June 30, while its cost of sales was up 10.1 percent to $60.4 million for a gross profit of $16.2 million. Net income, though, was basically flat at $2.8 million, or a penny lower per share than it was one year ago.
The online diamond retailer boosted its international sales by 28.2 percent year over year to $9.1 million. Excluding the impact from foreign exchange rate conversions, however, that increase amounted to 21 percent. The retailer’s total orders increased approximately 3.5 percent to 39,407 for an average ticket price of $1,944, an increase of 6 percent against the second quarter of 2009. Blue Nile reported that its sales growth during the quarter was strongest for nonengagement jewelry, including diamond bands, earrings and necklaces.
Bidz.com’s Revenues Down
Online jewelry retailer Bidz.com reported a net loss of $653,000 for the second quarter that ended on June 30, compared with the net income of $693,000 it posted for the previous year. The retailer’s net revenues dropped 5 percent year on year to $25.7 million in line with previous forecasts. Merchandise sales decreased 10 percent year over year to $23.7 million, while cost of revenues increased by 5 percent to $19.6 million and operating expenses were up 2 percent to $7 million.
J.C. Penney’s Sales Flat
J.C. Penney Company reported that its sales were basically flat, falling 0.1 percent year on year to $3.94 billion for the second quarter that ended on July 31. The retailer’s same-store sale rose 0.9 percent year on year, however, and net income totaled $14 million, compared against the loss of $1 million it posted one year ago. J.C. Penney’s share earnings moved from zero to 6 cents per share during the quarter.
The company expects its comparable-store sales to increase by 2 percent to 3 percent during the third quarter and its total sales to be up by 1 percent or 2 percent due to its discontinuation of the Big Book catalogs.
Saks Reports Loss
Saks Incorporated reported a net loss of $32.2 million, or 21 cents per diluted share, for the second quarter that ended on July 31, compared with the loss of $60 million it posted one year ago. Second-quarter sales were up 5 percent year on year to $593 million, while same-store sales rose 4.6 percent. Saks’ cost of sales dropped 5.5 percent to $371 million. The merchandise categories that showed strength during the quarter included fashion jewelry, shoes, handbags, women’s designer and Wear apparel and men’s tailored clothing and accessories.
The company said that the net loss was due to $10.6 million in lease termination costs and $1.1 million in severance and store closing costs in Plano, Texas; Mission Viejo and San Diego, California; Portland, Oregon and Charleston, South Carolina.
PPR’s Sales, Profits Up
Luxury group PPR reported that its first-half revenue rose 4 percent year on year to $11 billion (EUR 8.1 billion) and profits jumped 87 percent to $533 million (EUR 403 million). Gucci Group sales rose 11 percent to $2.4 billion and the brand’s same-store sales gained by 8.5 percent.
Charles & Colvard Strengthens Revenue
Charles & Colvard, the moissante creator, reported that sales rose to $3.3 million during its second quarter that ended on June 30. The company posted a profit of $336,315, compared to the $1.3 million in sales and loss of $1.2 million it declared one year ago, noting in its second-quarter report that Russia has become a new market.
Article from the Rapaport Magazine - September 2010. To subscribe click here.