Retail jewelers posted a 4.4% increase in overall sales in 2003, according to a recently released Jewelers of America survey.
Chain jewelers posted the highest sales gains in 2003 at 10%, according to the Cost of Doing Business Survey. Sales in 2003 also surged for independent high-end and mid-range retailers, with 6.7% and 4.1% growth, respectively. JA members who categorized themselves as designer/artist/custom stores experienced a 1.5% bump for the year.
This marks the first time since 2000 that overall respondents enjoyed sales growth and the first time since 1999 respondents in all four categories reported growth, according to the 2004 edition of the study, which reports financial data compiled from 2003.
“We are delighted that JA members are now enjoying sales growth after hanging tough for two years during the economic downturn,” says Matt Runci, JA president and CEO.
In 2003, the median profitability of survey respondents rose to 4.5%, up from 4.2% in 2002, according to the survey of JA members. Those categorized as designer/artist/custom stores in the survey led the way with 11.7% growth. However, gross margins fell slightly, from 49% in 2002 to 48.8% in 2003. Independent mid-range retailers had the highest gross margins with 50.1%, followed by chain stores with 49.2%.
Distribution of sales among product categories remained largely unchanged from the year before, according to the survey. Once again, diamond jewelry (35%) and loose diamonds (12%) combined to account for nearly half of all sales in 2003. Karat gold jewelry and colored stones each represented 10% of the total sales.
The survey also found that the vast majority of respondents (72%) rent their stores. Independent high-end and independent mid-range stores are more likely to make the investment of purchasing their stores, according to the study.
Of those surveyed, 57% said they use the Internet as part of their overall business strategy, compared to 47% who said the same thing in 2002. The increase came mainly from jewelry retailers who are using the Internet strictly for promotional purposes. The number of jewelers using the Internet for both promotional and e-commerce transactions remained relatively steady at 19% of overall respondents. A total of 22% of respondents said they have not yet incorporated the Internet into their business plan, but will do so in the near future.
“Those findings clearly demonstrate that the Internet is continuing to play more of a role in our industry,” Runci said. “We fully expect the amount of online jewelry marketing and sales activity to keep increasing as more consumers browse and shop online and more retail jewelers become comfortable with promoting and transacting business over the Internet.”
The Cost of Doing Business Survey is based on confidential questionnaires completed and submitted by JA members. A total of 350 companies participated in the most recent survey, which represents a drop from 2003, when 380 firms completed the survey in the prior year.
The study is available to JA members for $19.95 and to non-members for $125. It can be ordered by calling Jewelers of America at 800-223-0673, or by visiting JA online at www.jewelers.org.