ZALE BUYS KARTEN’S, POSTS HOLIDAY GAIN
Zale Corp. has acquired Karten’s Jewelers, which has 20 stores in New Hampshire, Massachusetts, Connecticut and Rhode Island.
Karten’s will become part of Zales Jewelers, the company’s largest division with more than 540 stores. The stores will keep the Karten’s name for an unspecified time and then change to Zales Jewelers.
“This significantly strengthens our presence in the Northeast and gives us the opportunity to grow our Zales Jewelers name,” says Robert J. DiNicola, chairman, president and chief executive officer of Zale Corp. The acquisition also is one of Zale’s first steps in its goal of adding 250 stores through 1998.
Meanwhile, Zale Corp. announced that December sales totaled $297.7 million, up 6.2% from December 1994. “We’re pleased we were able to achieve these sales results without resorting to deep discounting or additional promotional events,” says DiNicola.
Zale, the largest U.S. jeweler, operates 1,189 stores and leased departments in the U.S., Guam and Puerto Rico.
BARRY’S REPORTS SECOND-QUARTER LOSS
Barry’s Jewelers Inc., the fourth largest U.S. jeweler, reported a loss of $447,000 on sales of $33.1 million for the second quarter of fiscal 1996 ended Nov. 30. That compares with a loss of $591,000 on sales of $31.4 million for the same quarter of fiscal 1995. Comparable-store sales were up 5%.
For the half year, Barry’s reported a net loss of $1.45 million on sales of $59.9 million, compared with a loss of $1.47 million on sales of $56 million. Comparable-store sales rose 3%.
In December, comparable-store sales rose 2%.
“Our investment to expand inventories throughout our store base and particularly in our new superstores is paying off by strengthening our results in the first and second quarters,” says Thomas S. Liston, interim president and chief executive officer. “We find the comparable-store sales satisfactory in light of the tough holiday season everyone experienced.”
Liston is optimistic about 1996, due in part to a recently completed debt financing and credit line expansion. Under a Dec. 29 agreement with Capital Markets Assurance Corp., up to $8 million of financing will be available to Barry’s Funding Corp., a wholly owned subsidiary. A new agreement with the Bank of Boston provides an additional $20 million in a new revolving line of credit. “Barry’s will be able to make better use of its assets, significantly lower its interest burden and gain the means to more vigorously pursue its growth strategies,” says Liston.
Barry’s operates 160 stores, most of them in California, Texas, Arizona, North and South Carolina, Utah, Montana, Colorado and Ohio.
REEDS JEWELERS POSTS SALES GAIN
Reeds Jewelers Inc., a 99-store chain based in Wilmington, N.C., reported net sales of $24.8 million for December, up 20% from December 1994.
Year-to-date sales for the 10 months ended Dec. 31 rose 15% to $79.3 million.
“We were able to achieve record results for December primarily through the large increase in new stores this year,” says Alan Zimmer, president and chief executive officer. Reeds opened six new stores in 1995 and bought the 21-store Melart Jewelers in Maryland.
“Comparable-store sales were flat, reflecting a very difficult retailing environment,” says Zimmer. “While our core business remained strong, sales from the Melart stores – in line with our expectations – declined about 15%.”
Regarding the acquisition, Zimmer says Albert Foer, former chairman of Melart, and Martin Stein, former president, have sold their interests and are no longer involved in the company.
The Melart headquarters in Silver Spring, Md., was closed and its operations were transferred to Reeds headquarters. About 45 employees were laid off at Melart headquarters. Melart stores will take the Reeds name over the next two to three years.
FRED MEYER BUYS 23 STERLING STORES
Fred Meyer Inc., Portland, Ore., became the fifth largest U.S. jewelry retailer in number of outlets in January with the purchase of 23 mall stores from Sterling Inc.
The 23 stores operate under the trade names Kay, Friedlander, Weisfield and Hudson Goodman. All will close briefly and reopen by April 1 under the Fred Meyer Jewelers name. The stores, all in California and Washington, bring the total operated by Fred Meyer to 159 (52 mall jewelry stores, 93 store-size jewelry departments in Fred Meyer one-stop-shopping stores and 14 stores that don’t sell jewelry).
Fred Meyer stores, located in seven western states, carry a variety of products, including food, apparel, home electronics, home improvement items and fine jewelry. Annual sales are about $3 billion. Jewelry accounts for 2.5% to 3% or more than $75 million. The company employs some 28,000 people, more than 850 of them in jewelry.
Sterling officials say the stores sold to Fred Meyer are in markets that overlap or didn’t meet Sterling’s performance requirements. But Edward Dayoob, who launched Fred Meyer’s jewelry division in 1973, is optimistic and says the acquisition is part of a strategy to “move the division into areas of good opportunities.”
FRIEDMAN’S INC. ANNOUNCES STRONG FIRST QUARTER
Friedman’s Inc., Savannah, Ga., reported income of $10.1 million on sales of $70.6 million in the first quarter of fiscal 1996 ended Dec. 31. That compares with income of $6.9 million on sales of $47.7 million in the same period of fiscal 1995.
The advance in income was due to higher sales levels, partially offset by a slightly lower merchandise margin and a higher provision for doubtful accounts, says the company. Income also was affected by a 1% increase in the income tax rate to 39%.
Per-share earnings were 82 cents, up from 72 cents.
Even though Christmas ’95 was “the most competitive in the jewelry category in the last five years, Friedman’s Inc. posted solid results that provide a very solid foundation for an excellent 1996,” says Bradley J. Stinn, president and chief executive officer.
Friedman’s, the third largest U.S. jeweler, ended the quarter with 231 stores, up from 151 the previous year. By late January the company had added four more stores.
DIAMONDS ON THE ‘MAIN FLOOR’
The fashion television show “Main Floor” featured a holiday segment on diamond jewelry Dec. 23. Host Nancy Stafford showed viewers some diamond gift suggestions, including tennis bracelets, earring studs and solitaire necklaces, along with many pieces from De Beers’ “50 Ways to Say Forever” collection of women’s diamond jewelry.
FINK’S HONORS ROLEX
Fink’s Jewelers of Roanoke, Lynchburg and Richmond, Va., and its subsidiary stores, Garibaldi and Bruns of Charlotte and Raleigh, N.C., recently named Rolex, the luxury watch brand, as their 1995 Supplier of the Year. Fink’s annually honors a supplier for superior service and impeccable quality. Rolex was also commended for its international marketing programs.
LURIA NAMES NEW CEO
Gerald Nathanson was named chief executive officer of L. Luria & Son Inc., Miami Lakes, Fla., in January. He succeeds Leonard Luria, who remains as chairman.
Nathanson is the first non-family member to head the jewelry and gift retail chain since it was established in 1898. He was formerly chief executive of Jefferson Ward in Miami and Pay ‘N’ Save Inc. in Seattle, Wash.
He said Luria’s shift from catalog showrooms to superstores enticed him because of the “great opportunity in managing the transition.”
Luria & Son expected to post a $14 million loss for 1995. But Nathanson said the company “retains a strong balance sheet and cash position with a net worth of approximately $70 million” after taking into account the expected loss.
STORE OPENINGS/CLOSINGS
Hyde Park opened a new store in January in Aspen, Colo. Staff includes graduate gemologist Scott La Du and resident watchmaker Igor Bodin. Hyde Park’s other two stores are in Denver, Colo.
Molly B – Distinctively Different Fine Jewelry opened in November in Harrisburg, Pa. Owner Molly Braunstein focuses on the area’s upscale consumers with direct mail advertising, exclusive designer jewelry lines and custom design services.
Crown Jewelers of Mississippi closed one of its stores in Jackson, Miss. Another Jackson location and a store in Pearl, Miss., remain open.