Gold jewelry sales rose 5.4% to a record $10.7 billion in 1995, the fourth consecutive year of gains, according to the World Gold Council. The number of pieces sold grew 5.5% to 124 million units.

In the fourth quarter alone, gold jewelry sales rose 4.7% to $4.7 billion. It was the 17th consecutive quarter of increases.

“The four-year momentum is a clear testament to gold jewelry’s enduring appeal to the American consumer and its proven profit potential for retailers,” says Michael C. Barlerin, the council’s chief executive officer. “We are pleased that gold jewelry has been able to sustain its steady growth and expect sales to continue to rise in 1996.”

Sales were up in all channels of distribution. Discount stores posted the biggest percentage increase (+11.1% in value and 8.7% in units).

Department stores exceeded last year’s modest gains with increases of 7.2% in dollar volume and 7.3% in units.

For independent jewelers, increases totaled 4.7% in dollar volume and 4.4% in units.

Chain jewelers reported gains of 4.6% in dollar volume and 4.7% in units.

Catalog showrooms rounded out the list with 0.4% increases in dollars and units.

(Sales figures for non-store retailers – including electronic and direct-mail operations – were unavailable at press time.)

Sales of gold jewelry rose in all merchandise categories as well in 1995. Earrings more than doubled the category average with an increase of 12.6% in dollar volume.

Charms were up 8.3%, non-chain necklaces 6.1%, wedding rings 6%, non-wedding rings 5.9%, bracelets 5.5% and neckchains 2.8%.

The information is based on sales reports from a national panel of more than 4,000 retailers in all major channels of distribution that sell gold jewelry. It includes only jewelry (not watches) in which gold content accounts for the primary value.


Is a national sales tax or a flat tax acceptable to the jewelry industry?

A surprisingly large number of retail jewelers say yes – if the money it generates is used to reduce or eliminate the federal income tax. That’s the finding of two recent polls of the JCK Retail Jewelers Panel.

Most jewelers oppose a national sales tax by itself. But 43% would favor one if it meant a corresponding reduction in personal income taxes. “If a federal sales tax was incorporated properly, we could do away with an income tax and minimize cheating and avoiding taxes,” says William E. Brundage Jr. of Louisville, Ky.

Still, the possibility of any type of national sales tax sends shivers down the spines of some jewelers. “I’m not for any kind of consumer taxes – whatever the reason,” says Simon Critchell, president of Cartier Inc., New York City. “We get enough of that [sales tax] at the state level already.” And Ed Bridge, president of Ben Bridge Jewelers, the 52-store chain based in Seattle, Wash., says flatly, “A national sales tax would be like the value-added tax they have in Europe. Eventually, we would be back to a luxury tax – which we just got rid of.”

In a separate poll, more than two in five jewelers said they favor a flat tax, as proposed by some presidential candidates, especially if it would replace the federal government’s current graduated income tax system. In fact, far more jewelers had something to say about a flat tax than about a possible national sales tax. Most who favor it believe “a true flat tax” (as several phrased it) would radically change a tax system they call complicated, unfair and too much geared to special-interest deductions. “Simplification would save millions of dollars just by eliminating costs of administering the current revenue system,” says Gilbert Davidson Jr. of Muskogee, Okla.

Charles Zerbe of Colorado Spring, Colo., says a flat tax would simplify the tax system, downsize the Internal Revenue Service, make the playing field more level and encourage economic growth. Indeed, many jewelers polled by JCK believe that simply setting a flat tax on income would lower interest rates, increase disposable income and savings, and restore money siphoned off by capital gains taxes, dividend taxes and inheritance taxes.

Meanwhile, one in three jewelers polled is flatly against a flat tax, contending it would benefit the wealthy and burden the middle class and business communities. Several jewelers suggest that regardless of how optimistic or high-sounding flat-tax proposals appear now, the resulting system would become pockmarked by special-interest deductions and loopholes. Even supporters of a flat tax concede that, human nature being what it is, problems would be a strong possibility. “My fear is that eventually we would still wind up where we are now,” says one Washington state jeweler who favors a flat tax.


Pendants are the highlight of a major promotion by the Italian Platinum Guild International in cooperation with 62 jewelry manufacturers. In fact, participating manufacturers have amassed a collection of more than 500 platinum pendants.

“Sales of platinum jewels [worldwide] have increased by 73% in the past five years,” says Barry Davison, executive director of Amplats, a South African mining consortium. And the trend is expected to continue.

The prevailing design trends for platinum pendants are animal motifs (especially butterflies, kittens and sea horses) and celestial and zodiac themes. Some also have sharp, chiseled shapes bearing an Art Deco influence.


Jewelers stand out as the most profitable retailing group in recent months, based on an analysis of the latest quarterly earnings reports of publicly held retailers. The analysis shows jewelers leading department stores and mass merchants, their primary non-jeweler competitors for sales.

Jewelry retailers also turned in a far better performance than jewelry suppliers for the quarter.

Here’s how the overall figures for sales and net income shape up, in terms of percentage change from the same period a year earlier:

Figures for mass merchants are shown with and without Wal-Mart because the retailer’s sheer size tends to distort the overall figures. In the latest quarter, for example, the huge Arkansas-based retailer had sales of $27.6 billion while the eight other companies in the mass merchant group had combined sales of $7.2 billion. Wal-Mart’s heavily discounted Christmas sales, already widely reported, were largely responsible for its decline in net income for the quarter ended Jan. 3 – its first drop after 99 consecutive quarters of higher profits. Wal-Mart’s weakness meant that overall mass merchant profit for the quarter was off just under 5% from a year earlier.

If Wal-Mart is excluded, the other eight companies in the group showed a combined quarterly increase of 33.4%. The main reason was sharply higher net at two big catalog houses, Spiegel and Fingerhut. Fingerhut’s figures are distorted by a special charge against earnings a year ago; for its quarter ended Dec. 31, the company reported a profit of $30.3 million compared with $12.7 million in 1994. But the 1994 figure was after a special one-time charge of $19.4 million.

Reports for four of the seven companies in the jewelry group included Christmas results, and all four showed strong profit growth. The leader was Friedman’s of Savannah, Ga., which reported $10.1 million in net profits for the quarter ended Dec. 31, up 46%. Sales grew 48% to $76.2 million. Tiffany was the next best gainer with a profit increase of 32% for the quarter ended Jan. 3, then came Piercing Pagoda with a gain of 29% and Zale Corp. with a gain of 10%.

Here’s how the figures look in more detail:

Reports from jewelry industry suppliers were mixed and, by and large, not very encouraging. One of the best performers was Lazare Kaplan International; for the quarter ended Nov. 30, sales totaled $72.3 million (up from $49.9 million) and net income totaled $1.53 million (up from $760,000). On the down side, Town & Country and Harlyn Products reported lower sales and earnings. T&C’s volume totaled $86.4 million (down from $96.7 million) and net was $6.3 million (down from $16.4 million). However, in the same quarter a year ago, T&C had a non-recurring gain of $17.3 million.

Among publicly held department stores, Federated showed huge gains for its Feb. 3 quarter, but much of the advance came from inclusion (starting Oct. 11) of Broadway Stores. For a number of other companies, the picture was not pretty. Nordstrom (for the quarter ended Dec. 31), Sears Roebuck (Dec. 31) and JCPenney (Jan. 27) reported sharply lower earnings, reflecting uninspired holiday selling.

Among the mass merchants, Venture reported lower sales and earnings for the quarter ended Jan. 27. Price/ Costco (quarter ended Nov. 26, thus missing Christmas sales) was a slim winner in both categories and, as mentioned earlier, Wal-Mart had an unusual down quarter while Spiegel and Fingerhut advanced.

Two big pawn shop operators were slightly ahead of the previous year’s quarter. Cash America (quarter ended Dec. 31) reported sales of $43.6 million, up from $41.8 million; net was $5.5 million against $5.3 million. U.S. Pawn (quarter to Sept. 30) reported sales of $2.4 million and profits of $153,000, both slight improvements over year-earlier figures.


Would you like to know more about the affluent? You’ll get help from a new study titled “New Accents on Affluence: How Today’s Wealthiest Five Percent are Redefining Affluence in America.” The study was conducted by Condé Nast Publications Inc., publisher of such upscale magazines as Gourmet, Vanity Fair, GQ, Vogue and Condé Nast Traveler.

Today’s affluent have changed considerably in attitude and number in the past few years. Understanding these changes can help jewelers to reach them and their pocketbooks.

First, the numbers. The study defines the affluent as those with household incomes of $100,000+. They increased from 1.7% of all households in 1967 to 4.9% in 1994, says the U.S. Census Bureau. Some private demographers estimate the number will explode to more than 7% by the turn of the century as the bulk of the Baby Boom generation settles into its peak earnings years.

What’s more, these affluent already control 53.4% of total discretionary income, according to The Conference Board, a business research company in New York City. That could buy a lot of jewelry!

Characteristics: Among the major findings of the study are six characteristics of today’s affluent.

1. They have a middle-class sensibility. They earned their wealth, pulling themselves up from the middle class through education, professional success and dual-income marriages.

2. They are savvy and value-driven. Unlike previous affluent segments, they are “functional consumers” and cross-shoppers who are as likely to buy from a chain drugstore as from an upscale department store. They are less concerned with status than with quality, value and service. They look for low price, but they will pay more for superior workmanship and personal attention.

3. They are redefining the meaning of success. Having reached middle age, they equate success with leisure time. They value time with friends and family. As consumers, they focus on new experiences, travel and self-improvement.

4. They seek financial stability. Because they are insecure about their wealth, they try to keep credit debt low, pay with cash and save/invest more than in the past.

5. They actively maintain and preserve their youth. They care about their appearance, health and physical fitness and are committed to a lifelong regimen of healthful diet, exercise and other youth-maintaining methods.

6. They use new technology to realize their goals. Today’s affluent are innovators who use personal computers, fax machines and cellular telephones to earn their living, manage their finances and spend their time more efficiently.

Adding the details: These characteristics offer a pen-and-pencil drawing of today’s affluents. To add flesh, the study groups the affluent into five categories, describing specific traits and offering sales advice for each category.

Luxury lovers (29% of the sample) are the most image- and status-conscious group. They want to stand out from the crowd, and thus are focused on appearance and youth. When selling to this group, stress the jewelry or jewelrymaker’s heritage, say it’s not a piece that just anyone would wear and talk about how exhilarating it will be to be seen wearing it.

Savvy affluents (23% of the sample) are the most price-conscious, spurn ostentation, are savers rather than investors and are focused on health, fitness and self-improvement. Invite these consumers to shop around; explain why they won’t find a better value. Stress how jewelry and watches retain their value; offer easy credit terms.

Trailblazers (21% of the sample) are the most likely to seek adventure and new experiences and are the most active investors, the most altruistic and the most satisfied with their lives. Show them the most exotic colored gems, the most complex watches, the most stylistically or technologically advanced designs. Tell them they’ve worked hard and deserve to reward themselves with this piece of jewelry and ask if they can afford not to experience it.

Contented affluents (14% of the sample) comprise the oldest group. They are likely to be retired and to feel well-off. They are least appearance-conscious and least interested in technology. Stress that your jewelry is of classic, low-profile and practical design.

Strained affluents (13% of the sample) have the lowest net worth of any affluent segment but are very status- and image-conscious. Explain why your merchandise is more affordable than they may think. And let them know that a piece of merchandise from your store or a particular manufacturer says to the world “I’ve made it.”

The study comprised three samples of 1,000 adults each: a national sample of adults with $100,000+ household incomes, a sample of Condé Nast subscribers with $100,000+ household incomes and a sample of “aspirationally affluent” Condé Nast subscribers with household incomes of $35,000-$100,000. All participants were asked the same questions. The main report and customized versions are available. For fees, contact Condé Nast Publications, 350 Madison Ave., New York, NY 10017; (212) 880-8800.


Think you know how your favorite customer prefers to pay for his or her purchases? Don’t be so sure. A survey of consumers and major retailers conducted for the Ernst & Young accounting company and Chain Store Age magazine found that many retailers don’t.

“With record increases in consumer spending, retailers have to better understand the buying habits of their customers if they are to survive in this cutthroat industry,” says Robert Untracht, national director of consumer products industry services for Ernst & Young.

Retailers think their decision to accept credit cards is a bigger attraction to consumers than it is. Consumer payment preferences (in descending order) are cash, check and Visa/MasterCard.

Eighty percent of retailers believe accepting credit cards increases sales. But 85% of consumers say they would shop in a particular store even if it didn’t accept cards.

Other findings:

  • Retailers often misread the impact of promotions on the use of credit cards. They think cash-back programs, frequent-marketing programs and advertising are the way to go; consumers say they are more likely to use a credit card tied to a discount or coupon program.

  • Retailers also misunderstand what influences a customer to use a certain bank or affinity credit card (such as a Visa card tied to a charity or airline). Forty-eight percent of retailers think point-of-purchase signs promoting these cards are a factor, while 80% of consumers say they are not. Fifty-four percent of retailers think employee suggestions will convince consumers to use such a card; 95% of consumers say they won’t.

  • In the future, consumers want to use fewer private-label credit cards (mentioned by 42% of respondents) and fewer debit cards (41%); nearly half (45%) want to use cash more often.

Jewelers agree the current tax system is a headache. But they’re divided on some current proposals for change.


Source: JCK Retail Jewelers Panels, January/February 1996
% of those responding
Yes 21%
No 71%
Uncertain 1%
No answer 7%

(% increases from 1994, by retail channel)

Note: The market-share-by-dollar-volume column adds to 101 because of rounding. Source: World Gold Council.
dollar volume unit volume market share
Discount stores 11.10% 8.70% 13%
Department stores 7.20% 7.30% 21%
Independent jewelers 4.70% 4.40% 24%
Chain jewelers 4.60% 4.70% 29%
Catalog showrooms 0.40% 0.40% 14%


Source: JCK Retail Jewelers Panels, January/February 1996
Yes 43%
No 45%
Uncertain 4%
No answer 8%


Source: JCK Retail Jewelers Panels, January/February 1996
Yes 44%
No 33%
Uncertain 9%
No answer 14%


Source: Publicly traded firms’ quarterly earnings reports.
Sales Earnings
Jewelry stores 12.60% 19.30%
Jewelry supplier firms 3.50% -4.90%
Department stores 13.00% -17.60%
Mass merchants 11.00% -4.80%
(including Wal-Mart)
Mass merchants 4.90% 33.40%
(excluding Wal-Mart)


Source: Publicly traded companies’ quarterly earnings reports.
latest quarter $000 prior year latest quarter $000 prior year
Barry’s Jewelers $33.1 $31.4
(Nov. 30)
Friedman’s $76.2 $51.3 $10.1 $6.9
(Dec. 31)
Little Switzerland $9.7 $14.9 $0.4
(Dec. 2)
Piercing Pagoda $49.1 $36.1 $5.7 $4.4
(Dec. 31)
Reeds Jewelers $21.2 $18.3 $0.2 $0.7
(Nov. 30)
Tiffany & Co. $280.7 $239.3 $25.5 $19.3
(Jan. 31)
Zale Corp. $451.9 $427.2 $46.2 $41.8
(Jan. 31)
Total $921.9 $819.2 $87.7 $73.5
% change +12.6% +19.3%

Luxury goods and jewelry were a bright spot for many retailers this past Christmas. They also have been a bright spot for consumer magazine publishers. A Women’s Wear Daily special report on marketing and media in the fashion industry says that as the fashion and beauty advertising pie shrinks, consumer fashion magazines for women are turning increasingly to other categories. Primed for growth is the luxury market, including jewelry, watches and Italian fashion.

Even traditional women’s magazines such as McCall’s and Good Housekeeping are reenergizing their fashion sections to attract today’s women.

Do you stock jewelry and watches similar to what women in your neighborhood now see in magazines they read every month?

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