Rapaport Magazine

Retail Bulletin

U.S. Jewelry CPI Down Again
   The U.S. consumer price index (CPI) for jewelry eased again in March, falling 3 percent year on year to 176.1 points in response to weaker prices for precious metals. The index was a touch higher than February’s reading of 175.9 points.
  • The U.S. Bureau of Labor Statistics reported that the CPI maintained a historically strong trend, with March representing 27 consecutive months of a reading of more than 170 points. 
  • The CPI for jewelry reached a record 183 points in January 2012. 
  • The CPI for all product categories combined in March rose 2 percent year on year to 232.3 points, which was down just slightly from a record high of 232.77 points in February.
U.S. Jewelry Store Sales Rise
   U.S. jewelry store sales rose 4 percent year on year in February to $2.76 billion, which was a new high for the month, according to the U.S. Census Bureau. For the first two months of 2013, U.S. jewelry store sales have risen 8 percent to $4.69 billion.
   However, the sales increase was much lower than what was calculated for the month of January. Additionally, January’s sales figure was revised $20 million lower than earlier estimates to $1.93 billion, representing a year-on-year increase of 14 percent. Advanced sales for March at U.S. department stores plunged 6 percent year on year to $13.89 billion, following similar declines in January and February.
U.S. chain-store sales in March posted a comparable-store sales increase of 2 percent year on year, which the International Council of Shopping Centers (ICSC) called a “modest gain” that failed to meet expectations of a 3 percent increase. ICSC anticipates comparable-store sales will increase between 2 percent and 3 percent in April.
   In a separate report, the National Retail Federation (NRF) blamed a “harmful fiscal policy” for weaker than expected retail sales in March. The NRF pointed out that the payroll tax hike that took affect January 1 finally caught up with the economy. Similar to the ICSC’s report, the NRF concluded that retail sales, excluding automobiles, gas stations and restaurants, rose less than 2 percent unadjusted year over year.

LVMH Watch, Jewelry Sales Fall
   LVMH Moët Hennessy Louis Vuitton reported that sales rose 6 percent year on year to $9 billion (EUR 6.95 billion) in the first quarter that ended on March 31, 2013. Same-store sales rose 7 percent.
  • The watches and jewelry division’s revenue fell 1 percent year on year to $814 million (EUR 624 million).
  • On a same-store basis, sales in the watches and jewelry division rose 2 percent.
  • Bulgari confirmed the success of its Serpenti line and recorded strong revenue growth in its own stores, according to LVMH.
Richemont Expects Jump in Profits
   Swiss luxury goods group Richemont expects its profit to surge 30 percent year on year, largely as a result of favorable exchange rates at the end of the company’s fiscal year. The group operates luxury brands Cartier, Van Cleef & Arpels, Piaget and Montblanc, among others. It revealed its projected results in line with Swiss stock exchange rules that require companies to make public any significant anticipated changes in financial results. Richemont is scheduled to report its full-year results on May 16.
  • Sales rose 14 percent year on year on a reported basis and 9 percent on a constant-exchange-rate basis for the year that ended on March 30, 2013. 
  • The company’s operating profit for the year is likely to show an increase of approximately 18 percent, according to the group.
Lazare Kaplan Estimates Sales Drop
   Lazare Kaplan International Inc. (LKI) notified the Securities and Exchange Commission (SEC) that it would again be filing a quarterly financial report late for the fiscal period that ended on February 28, 2013.
  • LKI estimated that its revenue for the fiscal third quarter fell 31 percent year on year to $15.3 million.
  • Sales for the first nine months of the fiscal year slipped 38 percent to $50.2 million. The decrease reflected a drop in sales of both polished and rough diamonds, according to the company.
   LKI has been unable to file its quarterly and fiscal-year financial statements since September 2009 due to “unresolved material uncertainties” concerning the collectability and recovery of certain assets and potential obligations under certain lines of credit. The company also noted that its litigation with Antwerp Diamond Bank N.V. and KBC Bank N.V., and the inability of the company to resolve these material uncertainties, has adversely impacted its ability to transact business. 

Article from the Rapaport Magazine - May 2013. To subscribe click here.

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