Rapaport Magazine

Retail Bulletin

Consumer Confidence Up Again
   The Conference Board Consumer Confidence Index® posted a moderate increase in November after rising in October. The Index now stands at 73.7, up from 73.1 in October. The Present Situation Index was virtually unchanged at 56.6 versus 56.7 last month. The Expectations Index rose to 85.1 from 84 last month.
   The November index is now at its highest level since February 2008. Consumers who stated that business conditions are good declined to 14.4 percent from 16.5 percent, while those who said business conditions are bad decreased to 31.5 percent from 33 percent.

U.S. Jewelry CPI Drops
   The U.S. consumer price index (CPI) for jewelry fell 1.3 percent year on year in October to 179.2 points, which was also 1.32 points less than September’s reading.
   However, the CPI remains at historically high levels and October’s measure marked
22 consecutive months of a reading of more than 170 points.

   For all product categories combined, the CPI rose 2.2 percent year on year in October to 231.8 points, setting a new record high.

U.S. Jewelry Store Sales Rise
   The U.S. Department of Commerce reported that jewelry store sales in September rose
1.5 percent year on year to almost $2.1 billion. For the first three quarters of 2012, U.S. jewelry store sales increased 3.6 percent to $19.7 billion as price inflation remained steady at 2 percent.

   Department store sales in September fell 1.5 percent year on year to $13.7 billion, according to the National Retail Federation (NRF).

U.S. Online Retail Sales Jump
   Online retail sales in the U.S. during the third quarter rose 15 percent year on year
to $41.9 billion, according to comScore Inc. The rate of growth was in line with the previous quarter and confirmed the continued strength of the ecommerce sector, offering some optimism for the approaching holiday season, according to comScore’s chairman, Gian Fulgoni.

Signet’s Profit Climbs
   Signet Group reported third-quarter sales rose .8 percent year on year to $716.2 million
for the three months that ended on October 27. However, profit soared nearly 34 percent to $34.9 million. Same-store sales rose 1.4 percent.

   U.S. division sales rose more than 2 percent year on year to $575.6 million, while
same-store sales increased by 1.2 percent. Comparable-store sales at Kay rose 5.5 percent, but dropped 4.1 percent at Jared. U.K. division sales at constant-exchange rates fell
2.2 percent to $140.6 million, while same-store sales jumped 2.3 percent.

Zales Sales Increase
   Zale Corporation reported sales rose 1.8 percent year on year to $357.5 million for
the first fiscal quarter that ended on October 31. Same-store sales improved 3.9 percent
year on year.

   Zales, Zales Outlet and Gordon’s in the U.S. experienced comparable-store sales increases of 3.9 percent, while Peoples Jewellers and Mappins Jewellers in Canada posted
a same-store increase of 5.5 percent at constant-exchange rates.

Berkshire Hathaway’s Sales Rise
   Berkshire Hathaway reported modest increases in its retail business during the third quarter that ended on September 30, while earnings at its three jewelry businesses declined. Revenue across Berkshire’s retail division, which includes Borsheims, Helzberg Diamonds and Ben Bridge Jewelers, and other stores, rose 5 percent year on year to $712 million during the quarter.

Tiffany & Co. Reports Profits Down
   Tiffany & Co. reported that worldwide net sales rose 4 percent year on year to
$853 million for the third quarter that ended on October 31. However, net earnings for the quarter fell 30 percent to $63 million. The company revised its full-year financial forecast
to a 5 percent to 6 percent increase in worldwide net sales from the previous expectation of 6 percent to 7 percent growth.

   Comparable-store sales rose 1 percent worldwide. Sales in the Americas improved
3 percent year on year to $400 million and the company’s flagship store in New York realized a 5 percent increase in sales during the period.

   For the nine months that ended on October 31, worldwide net sales reached $2.6 billion, but net earnings declined 9 percent to $237 million.

Blue Nile’s U.S. Sales Up
   Blue Nile’s sales rose nearly 20 percent year on year to $89.8 million for the third quarter that ended on September 30. U.S. sales rose 25 percent to $75.9 million with net sales of engagement jewelry up 32 percent to $54.1 million and nonengagement net jewelry sales increasing 12 percent to $21.8 million. Blue Nile determined its new customer base grew 22 percent during the quarter. International net sales for Blue Nile slipped 3.3 percent to $13.9 million.

Richemont Reports Strong First Half
   Richemont reported that sales rose 21 percent year on year to $6.49 billion
(EUR 5.1 billion) in the six months that ended on September 30. The Swiss luxury
group reported that profit rose 52 percent to
$1.37 billion (EUR 1.08 billion). Sales at Richemont’s jewelry division, which includes Cartier and Van Cleef & Arpels, rose
20 percent to $3.31 billion (EUR 2.61 billion). Sales at its specialist watchmakers
division increased 25 percent to $1.85 billion (EUR 1.46 billion).

Chow Tai Fook’s Profit Falls
   Chow Tai Fook reported that its net profit slumped 33 percent year on year to
$244.2 million
(HKD 1.89 billion) during the first fiscal half, which ended on September 30. Revenues grew 7 percent to $3.28 billion (HKD 25.44 billion), while same-store sales fell 1.7 percent.
   Revenue in China, including wholesale and retail sales, rose 7 percent to $1.85 billion
(HKD 14.32 billion) as the company expands.

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

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