FRIEDMAN’S INC. POSTS 39.7% REVENUE GAIN
Friedman’s Inc., the fourth-largest U.S. jewelry retailer, reported record earnings for the fiscal year ended Sept. 30.
Revenue totaled $192.2 million (up 40%) and net income totaled $15.5 million (up 49%) on net sales of $169.4 (up 39%). Comparable-store sales grew just 3%. The yearly totals are before an after-tax charge of $1.7 million related to the early retirement of high-coupon debt.
For the fourth quarter alone, revenue was $37.6 million (up 25%) and net income was $2.1 million (up 152%) on sales of $32.1 million (up 22%). Comparable-store sales fell 6%.
The fourth-quarter didn’t meet expectations largely because of some stores in states where the company is just now establishing itself, says Bradley J. Stinn, chairman and chief executive officer. Friedman’s instituted changes in operations, especially credit policies, due to what Stinn calls “unacceptable business disciplines.”
Overall, Stinn calls fiscal 1996 a very good year. “We continued the rapid pace of our power strip center-based expansion program, maintained our industry-leading levels of profitability and competitiveness and almost doubled our equity capitalization while finishing the year debt-free,” he says. “We significantly enhanced our management depth and entered fiscal 1997 with considerable momentum.”
Friedman’s opened 86 new stores for a total of 301 in fiscal 1996.
STERLING OPENS DENVER STORE WITH CHARITY EVENT
Sterling Inc., Akron, Ohio, added a new location in Englewood, Colo., to its chain of Jared The Galleria of Jewelry superstores. The opening featured the cutting of a “money ribbon” and the presentation of $1,000 to Families First, an organization that offers counseling, education and other support to neglected and abused children.
Jared The Galleria of Jewelry stores began in 1993 in Akron and suburban Detroit, Mich., featuring low prices for diamonds, gold, colored gems and watches in stores five times the size of an average mall jewelry store. The new Denver store offers 10,000 jewelry items retailing for $10 to $20,000.
HSN, SILVER KING & SAVOY AGREE TO MERGE
Shareholders of the Home Shopping Network, Silver King Communications Inc. and Savoy Pictures Entertainment Inc. have approved a merger of the three companies.
Shareholders of Silver King Communications also voted to change the company name to HSN Inc. The combined company began trading on the New York Stock Exchange under the symbol HSNI.
“It has taken us more than a year to bring the consolidation of these three companies to their respective shareholders for a vote,” says HSN Inc. Chairman Barry Diller. “Now we have one company with a strong balance sheet in interesting businesses and with a great appetite for growth.”
James Held, vice chairman of HSN Inc. and president and chief executive of Home Shopping Network, says the network anticipates strong growth domestically and internationally this year. This includes a program venture called “America’s Jewelry Store,” a 24-hour channel devoted exclusively to quality jewelry. The new venture began Jan. 1.
This follows several strategic moves in 1996, including investments in H.O.T., the leading home shopping service in Germany, and in SHOP, a new home shopping channel in Japan. HSN also is undertaking a $35 million infrastructure project designed improve order fulfillment.
Silver King’s television broadcast group, the sixth largest in the nation, owns and operates 12 independent full-power UHF broadcast stations in 11 markets, reaching about 29 million TV households. Those include 10 of the 16 largest markets in the U.S., including Chicago, Philadelphia and San Francisco.
ZALE THANK-YOU DINNER HONORS SUPPLIERS
When times are tough, you find out who your real friends are. Zale Corp. found its friends three years ago as it emerged from bankruptcy.
Many of these friends are vendors, and Zale recently said “thank you” to them at a gala event at its headquarters in Irving, Tex. More than 200 vendors attended the event, which featured entertainer Susan Anton. “Our vendors and suppliers have been integral players in our comeback,” says Robert DiNicola, chairman and chief executive officer. “Over the past three years, they have worked closely with us to rebuild the company. Like us, they recognized the value of this great franchise and refused to let it slip away. This dinner was our way of showing our deep appreciation for all their efforts.”
The event also recognized Zale’s successful return to prominence in the industry, a turnaround marked by two consecutive years of double-digit increases in comparable-store sales.
At the gala, Zale officials reiterated their growth strategy. The strategy includes remodeling more than 500 of its 1,250 outlets in the past 21/2 years, opening 120 new stores in the past year and planning 200 more stores in the next three years.
Zale operates four divisions: Zales Jewelers, Gordon’s Jewelers, Bailey Banks & Biddle and Diamond Park Fine Jewelers leased departments.
One of those, Bailey Banks & Biddle, is significantly expanding its reach in major upscale markets on the East Coast. The chain opened or remodeled 13 stores in New York, New Jersey, Connecticut and Florida this past fall. “By aggressively entering and reestablishing ourselves in key areas, we intend to bolster our presence in upscale jewelry retailing,” says DiNicola.
Zale’s fall initiative had two main goals, says Paul Leonard, president of the Bailey Banks & Biddle division:
To expand the customer base through a direct mail campaign.
To position the stores in upscale malls near residents who reflect the desired customer profiles. The average Bailey Banks & Biddle customer has an annual household income of $75,000, about 60% above the national average. The average sale is $546.
The chain also worked to improve merchandise selection through centralized buying and to strengthen its role as a “local jeweler” through strong customer service.
As of late 1996, Bailey Banks & Biddle had 112 stores in the U.S. and Guam.
Schwarzschild Jewelers of Richmond, Va., celebrates its 100th anniversary this year. The celebration actually began in November with a private fashion show and fundraiser sponsored by Schwarzschild and Town & Country magazine to benefit the Massey Cancer Center.
The company also will launch a new logo, a series of historically based ads and the sale of two commemorative pieces: the Centennial Diamond Ring and the Centennial Diamond from Lazare Kaplan.
W.H. Schwarzschild started the company in 1897 as the Old Dominion Watch Co., a franchise of Hamilton Watches.