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Retail Bulletin

Consumer Confidence Rises Again
   The Conference Board Consumer Confidence Index® in June increased for the third consecutive month. The Index now stands at 81.4, up from 74.3 in May, and is now at its highest level since January 2008. The Present Situation Index increased to 69.2 from 64.8. The Expectations Index improved to 89.5 from 80.6 last month.
  • Consumers stating business conditions are good held steady at 19 percent, while those saying business conditions are bad decreased to 25 percent from 26 percent. 
  • Consumers were also more positive about the job market. Those claiming jobs are plentiful increased to 12 percent from 10 percent, while those claiming jobs are hard to get edged up to 37 percent from 36 percent.
  • Consumers’ expectations regarding the short-term outlook improved again in June. Those expecting business conditions to be better over the next six months increased to 20 percent from 19 percent, while those expecting business conditions to worsen decreased to 11 percent from 12 percent.
  • Consumers’ outlook for the labor market was also more optimistic. Those anticipating more jobs in the months ahead improved to 20 percent from 16 percent, while those anticipating fewer jobs decreased to 16 percent from 20 percent. 
  • The proportion of consumers expecting their incomes to increase dipped slightly to 15 percent from 16 percent, while those expecting a decrease declined to 14 percent from 15 percent.
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U.S. Jewelry CPI Flat in May
   The Bureau of Labor Statistics reported that the U.S. consumer price index (CPI) for jewelry was unchanged in May compared with one year ago at 175.4 points. The monthly reading was the first this year that did not register a decline. In April, the CPI dropped 1 percent, following a 3 percent contraction in both March and February and a 4 percent decline in January.
  • The CPI still maintained a historically strong trend, registering the 29th consecutive month of more than 170 points.
  • The CPI for all product categories combined in May rose 1 percent year on year to 231.83 points, which was higher than April’s reading but still lower than the record high of 232.77 points posted in February. 
U.S. Jewelry Store Sales Up in April
   Sales at U.S. jewelry stores, rose 18 percent year on year to $2.42 billion in April, the most recent reporting month for the sector.
  • Jewelry store sales have remained strong during the first four months of the year, increasing 11 percent to $9.57 billion compared with the first four months of 2012. 
  • The National Retail Federation (NRF) noted a 4.8 percent increase in retail sales for May, excluding automobiles, gas stations and restaurants. 
Small Business Index Improves Despite Tepid Economy
   U.S. small business owners showed improved confidence, matching the level of one year ago, according to the June index of optimism published by the National Federation of Independent Business (NFIB). The latest index rose 2.3 points during May to 94.4 points. However, the NFIB cautioned that even though the reading was the second highest since the Great Recession started in December 2007, the index did not signal strong economic growth for small businesses.
  • 24 percent of small business owners cited taxes as their top problem, 23 percent said regulations and red tape and 16 percent claimed that weak sales were their biggest issue. 
  • The net percentage of owners expecting higher real sales volume rose four points to 8 percent of all owners. NFIB concluded that sales expectations are trending better, but are still historically weak.
  • In May, a net negative 7 percent of all owners surveyed reported growth in inventory levels, one point below that reported in April. More owners are reducing stock than adding inventory, but the overall inventory picture was rather benign, according to the index.
Signet to Buy Back Shares
   Signet Jewelers Ltd. plans to buy back up to $350 million of its common stock, the Associated Press (AP) reported. Signet said the timing and pricing of the share buybacks will be at the discretion of the company and that the repurposed shares may be used for general corporate purposes. Signet said the buyback will be funded through its existing cash reserves and other sources of cash.
   The jewelry company also announced that it has declared a quarterly dividend of 15 cents per share that will be paid on August 28 to shareholders of record on August 2.*

Neiman Marcus Files for IPO
   Luxury retailer Neiman Marcus Inc. filed the necessary regulatory plans to launch an initial public offering (IPO) for as much as $100 million in stock, which is a standard filing figure. The number of shares to be offered and the price range for the proposed offering have not yet been determined. The offering will be made only by means of a prospectus.
   TPG and Warburg acquired Neiman Marcus in early October 2005 for $5.1 billion and took the retailer private at that time. The stock in this IPO will be sold by affiliates of Newton Holding LLC, TPG and Warburg Pincus.
   Neiman Marcus’ retail store segment includes Neiman Marcus, Last Call and Bergdorf Goodman.

Analyst Lifts Blue Nile Rating
   Mark Miller, an analyst at William Blair, upgraded Blue Nile Inc. to “outperform” from “market perform.” The Associated Press (AP) reported that Miller based his upgrade on rising consumer confidence, better access to consumer credit and stable diamond prices that should give a boost to Blue Nile’s stock.
   Miller was also optimistic about the second quarter, noting positive trends in the nonengagement jewelry business. He cited Blue Nile’s Band Matcher feature that makes it easier to match engagement rings with complimentary wedding bands as one of the company’s initiatives that would spur business. Blue Nile declined to comment.
*Additional reporting provided by Acquire Media.

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