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Retail Bulletin

Consumer Confidence Drops
   The Conference Board Consumer Confidence Index, which had increased slightly in August, decreased in September. The Index now stands at 79.7, down from 81.8 in August. The Present Situation Index grew to 73.2 from 70.9. The Expectations Index fell to 84.1 from 89.0 last month.
  • Consumers claiming business conditions are good increased to 20 percent from 19 percent, while those claiming business conditions are bad decreased to 24 percent from 25 percent. 
  • Consumers saying jobs are plentiful increased slightly to 12 percent from 11 percent, while those saying jobs are hard to get decreased to a five-year low of 33 percent.
  • The percentage of consumers expecting business conditions to improve over the next six months edged up to 21, while those expecting business conditions to worsen was virtually unchanged at 11 percent.
  • Consumers’ outlook for the labor market, however, grew more pessimistic. Those anticipating more jobs in the months ahead decreased to 17 percent from 18 percent, while those anticipating fewer jobs increased to 20 percent from 17 percent. The proportion of consumers expecting their incomes to increase declined to 15 percent from 18 percent.
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U.S. Jewelry CPI Jumps
   The Bureau of Labor Statistics (BLS) reported that the U.S. consumer price index (CPI) for jewelry rose 3 percent year on year in August to 182.13 points, the highest reading since the record high of 183.19 points in January 2012. However, for the first eight months of 2013, the jewelry CPI was basically flat.
  • The CPI reading was the tenth ever to exceed 180 points and marked the 32nd consecutive month with a reading of more than 170 points.
  • The CPI for all product categories combined increased 2 percent year on year in August to 233.53 points, a new record that surpassed the previous high set just one month earlier. 

U.S. Jewelry Stores Sales Rise
   U.S. jewelry store sales rose 9 percent year on year in July to $2.22 billion, continuing the strong growth trend that began in November 2012.
  • For the first seven months of the year, jewelry store sales increased 10 percent year on year to $17.26 billion.
  • In contrast, advanced sales estimates for U.S. department stores for August fell 5 percent to $14.5 billion. 
  • Unadjusted estimates for nonstore retail sales, including online sales, jumped 9 percent to $36 billion in August. 

Deloitte Expects Rise in Holiday Sales
   Deloitte’s retail and distribution practice expects U.S. Christmas-season retail sales to increase between 4 percent and 5 percent year on year in the range of $963 billion to $967 billion, excluding motor vehicle sales. The consulting firm reported that U.S. retail sales for Christmas 2012 rose almost 5 percent.
  • Nonstore retail sales are expected to grow by as much as 13 percent, according to the firm, citing three quarters of nonstore sales results from the online channel with additional sales coming from catalogs and interactive TV.
  • Deloitte anticipates that mobile-influenced retail store sales will account for 8 percent, or $66 billion, in sales this Christmas season, driven by consumers’ store-related smartphone activity, such as product research, price comparison or mobile application use.
  • The research firm ShopperTrak estimates that sales of general merchandise, apparel and accessories, furniture and other products would increase 2 percent year on year for the November and December holiday shopping season.

Investment Groups Buy Neiman Marcus
   TPG and Warburg Pincus, two private global equity firms, agreed to sell luxury retailer Neiman Marcus to an investment group led by Ares Management LLC and the Canada Pension Plan Investment Board in a deal worth $6 billion. Ares and Canada Pension Plan will hold an equal interest in the luxury retailer and current investors will retain a minority stake. The transaction is expected to close in the fourth quarter of 2013, subject to regulatory approvals and other customary closing conditions.
   Neiman Marcus operates 41 stores in the U.S. as well as two Bergdorf Goodman locations and 36 Last Call outlets. While the retailer does not report monthly sales, revenue rose 4 percent year on year to $1.1 billion for the most recent quarter that ended on April 27, 2013. Same-store sales increased 4 percent.

Richemont’s Sales Up
   Luxury group Richemont told shareholders that sales have been robust during the past five months through August 31, rising 9 percent year on year, or 4 percent at constant exchange rates. The group did not provide dollar figures. Richemont expects to report interim results for the first half of the fiscal year on November 8, 2013.
  • Jewelry sales rose by 8 percent year on year, while watch sales grew by 13 percent during the five-month period.
  • Sales across the Americas rose by 17 percent due in part to the sustained momentum of jewelry sales.

Sotheby’s Reviews Policies
   Sotheby’s informed shareholders that it would review its capital allocation and financial policies with the intent of releasing its findings in early 2014. Sotheby’s has undertaken restructuring projects in the past few years that have helped to boost its financial performance and generate additional capital to invest in new strategic growth initiatives, strengthen the balance sheet and build liquidity to pursue transaction opportunities such as lending and auction guarantees.
   Sotheby’s is continuing to invest in growing its business in China and other emerging markets and is allocating funds to improve the web platform, according to the firm.

Sun Capital Acquires Gem Shopping Network
   Private equity firm Sun Capital Partners Inc. acquired the Gem Shopping Network through an affiliate for an undisclosed sum. Gem Shopping Network reports reaching more than 40 million households with its live online streaming broadcasts that sell gemstones and jewelry.

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