PLATINUM DEMAND RISES
The platinum push continued last year as North America used 55,000 ounces of the metal in jewelry manufacturing. That was 22% more than in 1993, says a report from Johnson Matthey, a principal platinum refiner, fabricator and marketer.
North America remained far behind the top two users, but had the bigg-est percentage growth of any world region. (Japan used 1.45 million ounces for jewelry, up 7%; Europe used 95,000 ounces, down 10%.)
The U.S. jewelry industry was once the world’s largest consumer of platinum. But the Great Depression and controls on platinum during World War II reduced its use in jewelry to “insignificant” levels for 50 years, according to Johnson Matthey. Then in 1992, the Platinum Guild International launched a U.S. office to promote jewelry, and jewelry manufacturers started to reenter the market, focusing on wedding bands and designer pieces. Their success stimulated interest by other manufacturers, contributing to the strong growth in 1994.
Demand also grew in Japan last year despite the worst recession since World War II. During the year, many manufacturers introduced jewelry made of Platinum 1000, an almost pure platinum alloy. In addition to its popularity in luxury jewelry in Japan, platinum is gaining a following among young fashion-conscious consumers who buy less expensive pieces.
The decrease in European demand resulted from an unusually inflated figure for 1993, when Swatch used 10,000 ounces in limited-edition platinum watches. “Excluding that, demand was little changed,” says the report. In Germany, Europe’s largest platinum jewelry market, fabrication rose slightly as manufacturers began to shift from expensive, avant-garde pieces to more classical designs with wider appeal.
Demand in the rest of the world – primarily Thailand, Taiwan and Hong Kong – continued to grow slowly, rising 4% to 120,000 ounces. (This excludes an estimated 20,000 ounces of platinum used to make jewelry in China.)
THE BEST TIMES FOR BURGLARY
Professional burglars are more likely to strike commercial premises on weekends and during the early morning, according to a new report by Holmes Protection Group, New York City.
The report examines burglaries (which involve a break-in), but not robberies (unlawful taking by force or fear) or thefts (unlawful taking without force, such as fraud). And it covers all types of commercial establishments, not just jewelers. But many of the findings are similar to those cited in “101-Plus Ways to Protect Your Business,” a report on security for jewelers written by John J. Kennedy, president of the Jewelers’ Security Alliance.
William McGurn, vice president and director of security for Holmes, says, “Forty-one percent of actual or attempted commercial break-ins occur on Saturday or Sunday between midnight and 8 a.m., with the greatest concentration between 3 a.m. and 5 a.m.”
Until recently, three-day weekends were especially popular. But step ped-up surveillance by police and security firms has made inroads. “Long weekends are no longer the busy time they once were,” says McGurn.
Seasons have an effect, as well. Burglaries drop 20%-25% during the coldest part of winter. “Like the rest of us, burglars don’t like to work under difficult conditions,” he says.
McGurn offers this advice to reduce your risk of being burglarized:
Make your premises as “hard” as possible. Line walls and floors of vaults with steel. “Do what you can to slow down prospective burglars.”
Install separate alarm systems for the exterior and the interior to delay a break-in.
Obtain a visual-verification system to improve police response time. Quick response is critical because few commercial burglaries last more than 10-15 minutes. (JSA says jewelry store burglars need as little as three minutes to smash through a window or door and take whatever wasn’t put in the safe overnight.) But because 90% of commercial alarm signals are false, says McGurn, police can’t respond quickly to all of them. “If a break-in can be confirmed visually – now possible with new digital technology – the alarm company can upgrade the signal to a ‘burglary in process,’ which warrants a higher response priority from police.”
Follow strict procedures on control and distribution of keys and access cards. Collect cards from former em ployees. Change at least some of your locks every year.
Keep combinations to safes in a secure area.
Screen employees carefully. Conduct background checks and, where law allows, polygraph tests.
Avoid routines. Vary your opening and closing procedures daily so burglars can’t predict your actions.
DEFINING THE AFFLUENT
Want to know some secrets about that illusive affluent market?
The Platinum Guild International and David Arnold of Town & Country magazine offered some insights during the first Couture Collection & Conference, organized by the Miller-Freeman Group and held this summer in Newport Beach, Cal. Here are some findings of a T&C study of the market:
The affluent have a strong work ethic. In fact, 98% of those surveyed say work is the No. 1 reason for their financial success, followed by determination and drive, self-discipline, ability and talent, and a good education.
Most of the rich got their money the old-fashioned way: they worked for it. Of the very richest ($400,000+ in annual household income), 95% earned nearly all of their net worth.
The rich embrace risk. Seventy-eight percent say taking risks and an entrepreneurial spirit are important factors in their financial success. The results show a disproportionately high number of self-employed among the wealthy vs. the rest of the population.
The wealthy don’t believe in “financial success at any price”; they have a strong sense of ethics. Very few of them define success in terms of wealth or fame.
Self-confidence comes with the territory. Ninety-one percent say their sense of success comes from how they feel about themselves, not how others view them.
Status symbols are important, but not as important as power or being in charge.
Money represents freedom and being able to do what they want, plus security, comfort and a good future for their children.
The wealthy generally have a sense of responsibility and view philanthropy as important.
The wealthy don’t flaunt their money and most shun ostentation. They prefer to pay cash, and few have to borrow to pay for what they want. Discretionary income averages $1,566 per month for the group as a whole, though it rises to $7,091 per month for the top earners.
The wealthy are pragmatic shoppers and buy where they believe they get the best value – whether they’re spending more or less for something. They do shop in exclusive stores such as Saks Fifth Avenue and Neiman Marcus and in designer boutiques such as Ralph Lauren. But they’re just as likely to shop in discount centers, outlets and wholesale clubs such as Sam’s Club.
WATCH IMPORTS: SPOTLIGHT ON JAPAN
U.S. imports of non-precious-metal-case watches fell 2% to 236 million units in 1994. But quartz analog watches were a bright spot, rising 9% to nearly 127 million units and, for the first time, accounting for more than half (54%) of all watches imported to the U.S. That was good news for Japan’s watch industry, where quartz analogs account for 86% of non-precious-metal-case watches exported to the U.S.
Overall, U.S. imports of non-precious-metal-case watches from Japan grew 19% in units, including a substantial 25% increase in the quartz analog category. As a result, Japan has surpassed Hong Kong and now trails only China as the U.S.’s major source of quartz analog watches.
Looking at all types of watches imported by the U.S., China led in numbers, providing 40% of total units in 1994. Next were Japan (24%), Hong Kong (18%), the Philippines (10%) and Switzerland (3%). But the value picture was very different. Here Japan led with 36% of the dollar value, followed by Switzerland (28%), Hong Kong (11%), China (9%) and the Philippines (8%).
(Note: The accompanying chart showing imports of precious and non-precious-metal-case watches originally appeared in August JCK, page 31, but with incorrect figures for quartz analog, digital and anadigital watches. The correct figures appear here.)
PLATINUM DEMAND FOR JEWELRY (in ounces)
Source: Johnson Matthey
|Rest of the world||115,000||120,000||+4%|
WEEKENDS CLAIM BIGGEST SHARE OF BURGLARIES
Source: Holmes Protection Group
Members of the JCK Retail Jewelers Panel were fairly evenly divided when comparing actual sales volume with what they had expected in the first six months of the year.
The largest contingent (35%) said sales were below expectations. But very close behind were those whose sales were ahead of expectations (33%) or right on target (31%).
Asked to rate the outlook for the second half of the year, most were optimistic. Ten percent predicted business would be “excellent,” 30% “very good” and 33% “good.” The rest were less optimistic, with 25% anticipating “fair” business and 2% “poor.”
1994 WATCH IMPORTS TO U.S. BY TYPE (with % change from 1993)
Source: U.S. Department of Commerce
|Units (000)||Value (000)|
|Pocket, stop, other||12,612||-34%||$33,735||-25%|