Jewelers of America has published results of its most recent Cost of Doing Business Survey. Highlights of the survey this year include:
A median sales increase of 3.3% among all respondents (down from the 10.5% increase enjoyed by members the previous year).
Overall gross margins decreased to 47.4%, the lowest level since 1987.
Net profitability (profit as a percentage of sales) decreased from 7.3% to 6.1%, reversing a four-year trend.
Diamond jewelry and loose diamonds accounted for nearly half of all sales.
Sales growth across all categories is somewhat disappointing compared with results in the 2000 survey. Chain stores fared best, experiencing the largest sales growth—10.5%. Designers, artists, and custom jewelers saw negative growth to the tune of -4.3%. Independent high-range jewelers experienced 4.6% growth, and independent mid-range jewelers saw just .08% growth. Last year, chain stores enjoyed 15.6% growth; designers, artists, and custom jewelers, 13.5%; independent high-end jewelers, 11.1%; and independent mid-range jewelers, 8.6%.
In light of the recent state of the economy, jewelers are trying a number of strategies to increase sales, such as expanding into the incentives business, focusing more on best-selling items and dropping slower-moving lines, and buying or making unique items, according to the JA report.
Some 423 companies participated in this year’s survey, an increase of 2% over last year’s figures.
Distribution of Sales Among Members
|Diamonds (loose only)||16%|
|Karat gold jewelry||11%|
|Colored stone jewelry||9%|
|Other new jewelry||6%|
|Tabletop, gifts, silver flatware||2%|