The U.S. Consumer Confidence Index rose slightly in January 2011 to total 60.6 points after dipping to 53.3 points in December 2010, according to The Conference Board. Against January 2010, Consumer Confidence was up by four points. The Present Situation Index improved to 31 points in January 2011, against both the 25.2 points posted last January and the 24.9 points recorded for December. The Expectations Index moved up, as well, to 80.3 points versus the 77.3 points posted one year ago and the 72.3 points achieved in December.
Those consumers who said that business conditions were “good” increased to 9.8 percent in the January survey from the 7.7 percent logged for December, while those describing jobs as “plentiful” rose to 5.2 percent in January from the previous month’s total of 4.2 percent. Survey respondents who anticipated an improvement in business conditions during the next six months increased to 19 percent from the 16.8 percent tallied in December and 16 percent expect jobs to be more plentiful in the months ahead, compared with only 14.2 percent in December.
Lynn Franco, the director of The Conference Board Consumer Research Center, explained that consumers began the year in better spirits.
“Consumers rated business and labor market conditions more favorably and expressed greater confidence that the economy will continue to expand and generate more jobs in the months ahead,” she explained. “Income expectations are also more positive. Although pessimists still outnumber optimists, the gap has narrowed.”
U.S. Jewelry CPI Sets New Record
The Bureau of Labor Statistics (BLS) reported that the U.S. consumer price index (CPI) for jewelry hit a new high in December 2010 at 170.9 points, jumping 6.5 percent against last year. The December reading closed a year of strong jewelry inflation, with eight months registering CPIs of 160 points or more. This reading also marked the 35th consecutive month for which the jewelry CPI totaled over 150 points. The jewelry price index is based on the reference point of average prices in 1986, which is set at 100 points.
Meanwhile, the CPI for all product categories rose 1.4 percent year on year in December to 220.2 points. The base period for that overall reading was provided by an average of 100 points taken from 1982 to 1984.
Signet Posts Strong Holiday Sales
Signet Group’s same-store sales for the nine-week holiday season that ended on January 1, 2011 rose approximately 8 percent year on year. Signet’s total U.S. sales grew 10 percent in the nine-week period, while U.S. same-store sales were up by 12 percent. The average unit selling price in the U.S., excluding the charm bracelet category, rose 11 percent to $338 during the holiday period.
In the U.K., however, Signet’s total sales fell 5.3 percent during the holiday season as U.K. same-store sales slipped 4.2 percent. The average unit sales price achieved in the U.K. rose 4.9 percent to approximately $128 (GBP 81) in the same period.
For the full quarter that also ended on January 1, the company’s same-store sales were up 6.6 percent, while its U.S. same-store sales rose 8.9 percent. Signet did not provide hard totals for these percentage gains, save for the average selling prices.
Zale’s Revenue Rises
Zale Corporation reported that its total holiday season revenue rose 8.5 percent year on year to $533.1 million, while its comparable-store sales were also up 8.5 percent during the months of November and December 2010.
Same-store sales at Zale’s U.S. fine jewelry locales, which include Zales Jewelers, Zales Outlet and Gordon’s Jewelers, grew 7.5 percent year on year, while Kiosk Jewelry’s same-store sales gained by 4.2 percent. Sales of Zale’s Canadian brands, Peoples Jewellers and Mappins Jewellers, increased 15.6 percent. The jewelry retailer did not provide sales totals, with the exception of its total holiday revenue.
Tiffany’s Sales Exceed Expectations
Tiffany & Co.’s 2010 global holiday season sales increased 11 percent year on year to $888.5 million during November and December 2010. The company’s comparable-store sales grew by 8 percent. Michael J. Kowalski, Tiffany’s chairman and chief executive officer (CEO), added that healthy sales growth was seen in most product categories, with particular strength in Tiffany’s fine jewelry collections, diamond engagement rings and fashion gold jewelry.
Sales in the Americas region, which includes the U.S., Canada and South America, rose 9 percent year on year to $484.8 million and comparable-store sales gained by 7 percent. Sales at Tiffany’s New York flagship store increased 3 percent. Sales in Japan rose 11 percent year on year to $142.5 million and comparable-store sales were up 2 percent, while sales across the rest of the Asia-Pacific region grew 23 percent to $138.9 million, with comparable-store sales up 15 percent. Sales in Europe increased 13 percent to $114.9 million as comparable-store sales grew 15 percent due to growth across the continent.
Based on these “higher-than-expected” holiday results, Tiffany raised its forecast for the fiscal year that ended on January 31, 2011. The company now projects record sales of $3.1 billion for the year and net earnings of between $2.83 and $2.88 per share, an increase of between $2.72 and $2.77 per share against its pre-holiday forecast.
Richemont’s Jewelry Revenue Grows
Richemont reported that total sales were up 33 percent year on year to $2.81 billion (EUR 2.11 billion) during the group’s third fiscal quarter that ended on December 31, 2010. Sales rose by 17 percent in the Americas to $419.4 million (EUR 311 million), by 17 percent to $1.1 billion (EUR 791 million) in Europe, by 57 percent to $1 billion (EUR 772 million) across the Asia-Pacific region and by 21 percent to $314.3 million (EUR 233 million) in Japan alone. The company’s jewelry maison division sales gained by 30 percent to $1.5 billion (EUR 1.09 billion).
Richemont also reported that its Net-A-Porter website helped boost sales in Europe, while store expansion drove sales gains across the Asia-Pacific region. Richemont owns Cartier, Van Cleef & Arpels, Jaeger-LeCoultre, Piaget, IWC, Baume & Mercier, Vacheron Constantin, Officine Panerai, A. Lange & Söhne and Roger Dubuis, as well as the Ralph Lauren watch and jewelry joint venture.
Birks & Mayors’ Sales Up
Retailer Birks & Mayors’ net sales grew 8 percent year on year to $75.5 million during its fiscal 2011 holiday season, defined as extending from October 31 through December 25, 2010. This $5.6 million increase in net sales was driven by same-store sales gains, as the company’s total same-store sales grew by 4 percent, by 7 percent in Canada alone and by 2 percent at its U.S. operations. Sales from two new stores accounted for $1.1 million of Birks & Mayors’ seasonal revenue.
The stronger Canadian sales reflected increased store traffic and sales transactions, while the U.S. sales gain was fueled by a higher average sales transaction, according to the company.
Online Jewelry Sales Increase
Online U.S. retail sales rose by 12 percent year on year during the month of December 2010, according to IBM Coremetrics. The average online order rose to $190.42 from the $171.06 posted for 2009, a gain of 11 percent. Jewelry retailers also reported a significant sales increase of 18.5 percent. Both department stores and health and beauty retailers showed the strongest growth, with each category recording sales increases of approximately 23 percent.
Article from the Rapaport Magazine - February 2011. To subscribe click here.