Rapaport Magazine

Retail Bulletin


U.S. Jewelry CPI Rises
The U.S. consumer price index (CPI) for jewelry rose 2.1 percent year on year in September to 180.5 points, reaching its highest level since March.

The CPI remains at historically high levels and September’s measure marked
21 consecutive months of a reading of more than 170 points. The CPI reached a record
185 points in January.

For all product categories combined, the CPI rose 2 percent year on year in September to 231.4 points, setting a new record high.


Signet to Buy Ultra Stores
Signet Jewelers Ltd. agreed to acquire Ultra Stores Inc. from Crystal Financial LLC and its other stockholders for approximately $57 million in cash. Signet will not assume any debt in connection with the acquisition, the company stated.

Founded in 1991, Ultra Stores operates primarily in outlet centers and licensed jewelry departments. “The addition of Ultra will immediately result in our having a significant share of the outlet channel for jewelry,” said Michael Barnes, Signet’s CEO.

Ultra Stores, the parent company of Ultra Diamonds, filed for Chapter 11 protection in April 2009 and emerged with a reorganization plan later that year. It operates 138 stores
in 33 states, according to its website.

Affluents to Spend Less on Gifts
The American Affluent Research Center (AARC) released its 22nd Fall Affluent Market Tracking Study, which recorded the anticipated spending characteristics of 11.4 million households, representing 10 percent of the wealthiest U.S. consumers. Results indicated that holiday season spending by affluent households this year would fall an average of
2.4 percent year on year for gifts, with the average household holiday spending at $2,102.

AARC anticipates that affluents will spend $22.3 billion on gifts during this holiday season. The study recorded responses from 435 men and women with an average annual household income of $285,000, an average net worth of $3.1 million, average investable assets of
$1.8 million and an average primary residence value of $1.3 million.

A gift card, certificate or money top women’s gift wish list. Jewelry ranked as the third gift choice for 22 percent of affluent women. The top gift choice for men is clothing, followed by currency, DVDs and books.

The average wealthy household spends about four times more on gifts than the average U.S. household. The National Retail Federation (NRF) released research conducted by BIGinsight indicating that shoppers with salaries of less than $50,000 plan to spend a combined average of $518.65 for all gifts, decorations and food, representing a 2.8 percent year-on-year increase. However, those with incomes above $50,000 expect to spend an average of $1,031.85, an increase of $69 over what they spent a year ago.

In this study, 24 percent of consumers plan to make a jewelry or precious metal accessory purchase this holiday season, or basically the same as in the past two years.

Asia Pacific Tops Luxury Market
Asia Pacific’s share of the global luxury consumer market grew for the second consecutive year in 2011, overshadowing growth from more mature markets such as Europe and the Americas, according to Mintel, a market intelligence research firm.

The Asia-Pacific region, which overtook Europe to become the largest regional luxury goods market in 2010 with a 36 percent share, continued its upward trajectory in 2011 as its market share grew to a 38 percent share, the researchers noted. The region’s more than
20 percent revenue growth surpassed growth in Europe and the Americas.

The researchers noted a 23 percent year-on-year rate of growth for the watches and jewelry category in 2011, the same rate as in 2010, outpacing all categories of luxury goods for a second consecutive year. Mintel concluded that the jewelry category is not slowing, despite softer economic growth in China and other emerging markets, and the state of the European economy. It expects watches and jewelry to post strong growth rates of around, or in excess of, 20 percent in 2012.

Overall, the global luxury consumer goods market, excluding consumables and automobiles, grew by 14 percent in 2011, approaching $258 billion (EUR 200 billion) at retail selling prices, the researchers stated.

LVMH Revenue Up
LVMH reported third-quarter revenue rose 15 percent year on year to $8.93 billion
(EUR 6.9 billion) for the three months that ended on September 30. Revenue from
LVMH’s watches and jewelry division rose 8.5 percent year on year to $893 million
(EUR 690 million).

The jewelry and watch division’s organic growth, reflecting comparable-store sales and exchange rates, rose 7 percent during the first three quarters of the year, representing the weakest rate of growth among LVMH’s five divisions. However, the company noted that Bulgari’s Serpenti and B.Zero1 collections were strong and that Chaumet and Fred delivered good performance from their own boutiques this quarter.

LVMH stated that despite the background of an economic slowdown in Europe, the
luxury group remained confident in its outlook for 2012. The U.S. market continued to demonstrate momentum and Europe and Asia contributed to growth in spite of a challenging economic environment, according to the group. 

Article from the Rapaport Magazine - November 2012. To subscribe click here.

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