THE BIGGER, THE BETTER?
Jewelers in shopping centers have found the bigger the center, the bigger the median sales. That’s according to “Dollars & Cents of Shopping CentersTM: 1995,” the latest edition of a biennial study by the Urban Land Institute, Washington, D.C.
Not surprisingly, the study found that jewelers in the biggest shopping centers also pay more for rent, insurance, taxes and common area maintenance than those in smaller centers (see chart).
The study examines the amount of space leased, sales and charges paid by all types of retail stores in shopping centers. It divides centers into four types based on size and type of stores and services: neighborhood, community, regional and super regional. Figures are for the stores’ latest fiscal year (usually ended Dec. 31, 1994, but in some cases ended in late 1993).
Included in the study is a breakdown of leasable area and sales by national and local jewelry chains and independents. Here’s a closer look at jewelers in each type of shopping center.
Neighborhood centers: This type of shopping center offers convenience goods (such as food and drugs) and personal services (such as dry cleaning, hair care and shoe repairs) for the day-to-day living needs of the immediate neighborhood. A supermarket is the principal tenant.
Jewelry stores in neighborhood
a median 1,250 square feet and reported median sales of $270.07 per square foot. For independent jewelers alone, median sales were $216.57. Neighborhood centers had too few national and local jewelry chains to list figures separately.
Community centers: These offer the same goods and services as a neighborhood center plus some soft lines (such as apparel) and some hard lines (hardware and appliances). Many are built around a junior department store, variety store or discount department store. Others are built around multiple anchors in what are commonly called power centers.
Jewelry stores were a median 1,215 square feet with median sales of $314.23 per square foot in this type of shopping center. Breaking it down by type of jewelry store, those that are part of a national chain reported the highest median sales ($475.07 per square foot), followed by those that are part of local chains ($376.32) and independents ($262.22).
Regional centers: These offer general merchandise, apparel, furniture, home furnishings in depth and variety, as well as a range of services and recreational facilities. They are built around one or two full-line department stores of generally not less than 100,000 square feet.
Jewelry stores accounted for a median 1,084 square feet and reported median sales of $525.48 per square foot. By category, national jewelry chain stores enjoyed the highest median sales ($535.13 per square foot), followed by local jewelry chain store ($532.43) and independents ($463.59).
Super regional centers: These offer the same types of stores and services but in more depth and variety than a regional center and are built around three or more full-line department stores of generally not less than 100,000 square feet.
Jewelry stores measured a median 1,200 square feet and reported median sales of $630.13 per square foot. Local jewelry chain stores had the highest median sales ($709.56 per square foot), followed by national jewelry chain stores ($606.81) and independents ($562.76.)
VITAL STATISTICS FOR JEWELRY STORES IN FOUR TYPES OF SHOPPING CENTERS
(figures collected in 1994 for most recent fiscal year-end)
|Median gross leasable sq. ft.||Median sales per sq. ft.||Median rate of percentage rent||Median total rent per sq. ft.||Median common area taxes per sq. ft.|
|Super regional center||1,200||$630.13||6%||$50.00||$6.09|
|Median property taxes per sq. ft.||Median insurance per sq. ft.||Median total charges per sq. ft.|
|Super regional center||$2.07||$.09||$63.99|
Source: “Dollars &Cents of Shopping CentersTM: 1995,” Urban Land Institute.
GOLD OUTPUT FALLS FIRST TIME IN 19 YEARS
A steep drop in South African production sent world gold mine production into negative territory last year for the first time since 1975.
Production fell 13 metric tons to 2,296 metric tons, says the annual report of Gold Fields Mineral Services. While the 0.6% decrease is not a significant one, it does end a long-running production boom.
Before 1979, the only major gold sources were South Africa and the former Soviet Union. The U.S. had only one significant working gold mine. Though other sources existed, the low gold price couldn’t cover the cost of developing and operating them. (In South Africa, labor was cheap. In the Soviet Union, work was done without regard to the actual cost involved.)
In 1979, however, the gold price skyrocketed to $850 per ounce. It later fell to half that amount, but that was still about three times 1975 levels. This opened the doors to new projects in the U.S., where production grew fourfold from 1980 to 1994. In the same period, Canada doubled its output, Australia increased output fivefold and countries such as Brazil, Papua New Guinea and the Philippines started major gold mining operations.
Since then, wages and other mining costs have closed in on the gold price in many countries, causing a steady slowdown in mine development. In South Africa, production fell from 671 metric tons in 1985 to 584 in 1994.
The overall production decrease last year came even though the average price rose 6.8% to $384.15, a six-year high. The price increase was due primarily to a decline in the U.S. dollar (in which nearly all major gold transactions are made) against most other major currencies. That made gold cheaper in those countries.
Use in jewelry: The use of gold (newly mined and reprocessed scrap) for karat jewelry rose 2.4% last year. Increases in the U.S., India and China were offset by declines in Japan and Europe.
Jewelry manufacturers in Italy used 450.5 metric tons, down two tons from 1993. Their counterparts in the U.S. used 146.7 metric tons, up from 140. India reported the biggest increase, up 87 tons to 346. The increase was due in part to more domestic demand and strong growth in export jewelry production.
Demand for gold bullion coins took a severe beating. Only 74.1 metric tons went to gold coins vs. 121.2 tons in 1993. The reasons: reduced investor interest and Japan’s exit from bullion gold coin production, says Gold Fields Mineral Services. In addition, central banks sold 86 metric tons, down from 1,000 in 1993.
GOLD USED IN KARAT JEWELRY
(in metric tons)
Source: Gold 1995 by Gold Fields Mineral Services Ltd.
GIFTWARE: A STERLING TRADITION
Just as the nation turns its attention to tradition and value, consumers are turning their attention to the traditional value of sterling silver gifts.
Sales of sterling silver gifts (exclusive of flatware and jewelry) topped $200 million in 1994, according to the Silver Trust International, the marketing arm of the silver industry. That’s up 21% from 1990.
“The ’90s are about intrinsic value and acquiring fewer, higher quality items,” says STI Director Linda Meehan. “Consumers are looking to surround themselves with beautiful objects that not only make them feel good, but are functional as well. A silver gift conveys a certain cachet and can be passed down from one generation to the next.”
The study revealed the bridal market accounts for an estimated 50% of all sterling silver giftware sales. The next largest occasions after weddings are christenings, birthdays, graduations and anniversaries. Among the most popular sterling gifts are picture frames and serving pieces such as utensils, bowls and trays.
STI has earmarked two categories for high growth rates in the next few years: baby gifts (such as spoons, cups, rattles and teething rings) and corporate gifts (such as pens, money clips and desk accessories).
The study found that department stores account for 46% of total sterling giftware purchases. Jewelry stores account for 16% and various specialty stores comprise the remainder.