HSN AGREES TO SETTLE CLASS-ACTION LAWSUIT
The Home Shopping Network has agreed to post $2.5 million in cash and coupons to settle a 1991 class-action lawsuit by three Pennsylvania residents who claimed the network inflated the appraised value of its diamond and cubic zirconia jewelry to sell at an apparent discount.
The agreement covers anyone who bought diamond or CZ jewelry from HSN between Dec. 27, 1984, and May 20, 1991. About 400,000 past and current HSN customers in Pennsylvania are being informed of the settlement by mail and by advertisements in major state newspapers.
A Pennsylvania woman filed the original lawsuit in 1990. It was consolidated with a similar suit filed in 1991 by a Pennsylvania couple.
HSN denies it improperly inflated the value of its jewelry, says HSN attorney Laurence Shiekman, and the agreement specifically says the settlement isn’t an admission of liability. “With the uncertainties and costs of litigation, the company felt it was better to settle now and get on with its life,” says Shiekman.
William Cuker, attorney for the plaintiffs, couldn’t be reached for comment at press time. But David Craig, a jeweler in Middletown, Pa., who served as a consultant and expert witness for Cuker, explains how the case evolved. Craig says he evaluated two rings the original plaintiff bought from HSN and found the actual purchase price was consistent with the market. But he says the alleged market or appraisal value was greatly inflated, giving buyers the impression they were buying quality jewelry at a significant discount. “They might sell a ring for, say, $600, but claim it would cost $1,600 if bought from a jeweler,” says Craig. “As a jeweler, I found that offensive.”
He says the diamonds in the rings he examined were “extremely poor quality; they were junk.” The stated appraisal value seemed to be based on what the piece would cost if it were made by a skilled custom designer and contained fine stones, he says.
The attorneys worked out a settlement that received preliminary approval in Bucks County Court in April and was expected to receive final approval this month. Under the agreement, HSN customers are entitled to $25 or a 20%-off coupon (up to a $100 discount) for each piece of diamond jewelry they bought between Dec. 27, 1984, and May 20, 1991. Anyone who bought CZ jewelry can get $10 for each item or a 15% discount (up to a maximum of $25). The coupons must be used in the next year.
The jewelry they bought doesn’t have to be returned, but customers must provide a proof of purchase. They have until July 16 to file a claim.
JACKIE MYSTIQUE: EMOTION OVER LOGIC
Bidders went off their rockers for jewelry belonging to Jacqueline Kennedy Onassis at Sotheby’s on April 24. Emotions overcame logic as bids for an imitation pearl necklace went far ahead of those for a 5-ct. diamond ring.
The only rule at the auction was that normal standards of value didn’t apply. The 95 lots of fine jewelry routinely sold for 10 times presale estimates, with some particularly interesting pieces going for 50 times their estimates. The total reached $8.9 million compared with a presale estimate of $1.5 million.
The finale was the 40.2-ct. Lesotho III diamond, the engagement ring she received from her second husband, shipping magnate Aristotle Onassis. It sold for nearly $26 million, five times its presale estimate. The buyer: Anthony O’Reilly, chief executive officer of H.J. Heinz.
The most extraordinary lot was a kunzite and diamond ring that President Kennedy bought for his wife but never gave her. It sold for $415,000 against a presale estimate of $6,000-$8,000. An unidentified American bought the ring.
Another American paid $156,000 for a 5-ct., D-color, SI1-clarity pear-shaped diamond. That was twice the presale estimate.
“It was the mystique and magic of Jackie’s name that brought these prices,” says John Block, head of Sotheby’s jewelry department, who conducted the auction. “Mostly we tried to estimate the jewelry pieces at their basic market value.”
Before the auction, Diana Brooks, chief executive officer of Sotheby’s, conducted a tour of the estate arranged museum-like in the auction house’s showrooms. “This is the most intense interest we’ve ever had in any sale,” she says. The numbers bear that out: 75,000 catalogs sold before the sale, 40,000 tickets issued for those who wanted to view the estate, 80,000 absentee bids from 40 countries.
“These objects reveal a portrait of one of the most extraordinary women of the 20th century,” says Brooks. “They reflect her personal and private choices, conveying the elegance, taste and restraint for which she was renowned, and showing the range of her many, varied interests.”
Nothing was more personal than her jewelry, adds Block. “She gave grace and elegance to jewelry, not the other way around. Jackie had a very eclectic sense, freely mixing fine jewelry and costume jewelry. And she made it work beautifully.”
Presale interest: Block says there was a great deal of presale interest in all of the jewelry. Dealers predicted that many of the fashion jewelry pieces and smaller fine jewelry items would sell for many times their presale estimates because thousands of would-be buyers wanted a seemingly affordable piece of jewelry from a woman who’d been in the international spotlight for 35 years. But those who wanted an affordable piece of history were disappointed from the opening lot.
A gold pocketbook from Van Cleef & Arpels, listed at a modest $2,000-$3,000, went quickly to $60,000. Shortly afterward some gold earrings valued at a few hundred dollars saw bids topping $30,000.
An 18k gold, diamond and emerald wrist watch made by Piaget in 1963 was bought by Gerry Grinberg, chairman of Movado Group Inc., which distributes Piaget in North America. (The watch will find a permanent home at the new Piaget store scheduled to open this fall on Fifth Avenue in New York, N.Y.)
Imitation pearls highlighted the following day’s fashion jewelry session, which brought in a total of just under $2.5 million. Some lots of imitation pearls drew prices comparable to those that South Seas pearls fetch in normal times.
The lead-off lot, an imitation strand that Jackie wore in a photo with daughter Caroline, sold for $211,500 to the Franklin Mint of Lima, Pa., which produces commemorative items. Its top presale estimate was $700. Lynda Resnick, vice chairman of the mint, issued a statement after the auction saying the pearls will be on permanent display at the mint’s museum in suburban Philadelphia. “The people of the world adored Jackie, and now we can make part of Camelot accessible to all who visit our museum,” she said. She also implied the mint will use them to create a line of products: “Acquisition of this piece will serve as inspiration to our design team,” she said.
A set of two cultured pearl necklaces of similar style, one in which Jackie was pictured giving a campaign speech on behalf of her husband in 1960, drew a top bid of $100,000 from an anonymous buyer. Another simulated pearl necklace offered with a set of simulated diamond earclips drew a top bid of $67,500 while a fourth lot topped $75,000. All were valued at about $500.
When the hammer went down on the last of the nine sessions in the Onassis auction, the total raised was an astounding $34.5 million, about seven times the predicted outcome.
JACKIE HOT, COLOR NOT AT SPRING AUCTIONS
Though the big news this auction season was the Jacqueline Kennedy Onassis sale (see related story), the big dollars were expected to go to some spectacular colored diamonds offered at Sotheby’s and Christie’s the previous week.
The Jackie sale went wild, but colored diamonds took a swan dive. Nearly all of the important stones were either withdrawn before bidding began or failed to meet their reserve prices and were not sold.
Earlier this year, the market seemed poised for a dramatic surge. Buyers from Asia were growing interested, as shown by the strong prices paid for Argyle Diamond’s pink diamonds last fall. The first inkling that the market was less robust than many had thought came when Christie’s auctioneer Francois Curiel announced that two of the most important lots – a 15.46-ct. pink heart-shape and a 9.39-ct. pink marquise – had been withdrawn. Then most of the other major colored diamonds failed to find bidders.
The biggest disappointment was a pair of earrings with an 11.54-ct. fancy intense blue pear shape, 3.58-ct. fancy intense blue oval, a 10.93-ct. D-color pear shape and a 3.35-ct. D-color round. Christie’s expected $6.5 million, but got virtually no bids. “I’m really surprised they didn’t sell,” says Simon Teakle, who manages Christie’s New York jewelry department. “Overall, I’d say these and other colored diamonds didn’t sell because the market is very, very selective. If buyers see things they really want, they’ll pay crazy prices. If they don’t, they won’t bid.”
Colorless diamonds – including two 45-ct. D flawless diamonds – sold well at Christie’s. The first, a fattish pear shape, went for just over $3 million including house premium. The second, a round brilliant cut, fetched nearly $5.7 million.
Christie’s kept presale estimates relatively low on less lofty pieces and was rewarded with strong bidding by dealers from the U.S. and Asia. Nearly all sold well above their presale estimates. For example, a pair of old European colorless to light yellow diamonds (26.8 cts. and 16.9 cts.) in Belle Epoque settings sold for $600,000, nearly triple the presale estimate.
Sotheby’s withdrew several important colored diamond pieces, though one important stone, a 12.24-ct vivid yellow, did sell for $882,500. Sotheby’s offered the 40.45-ct. Ashoka Diamond from Harry Winston Inc. and a 38.61-ct. D flawless that was much closer to classic proportions. The latter sold for $2.86 million, but the Ashoka failed to attract a bid anywhere near the presale estimate of $4 million to $5 million.
All told, Christie’s sale totaled $41 million, with 77% of the lots sold. Sotheby’s total was $24.5 million, with 74.3% of the lots sold. (Sotheby’s percentage by dollar volume, however, was only 57.64%, one of the most disappointing in recent years, largely because of the unsold Ashoka.) The reserves on some of Sotheby’s pieces were too high, says John Block, its jewelry director. But he adds that about $6 million worth of the unsold lots were sold after the auction.
DIAMOND CLUBS, CSO MEET TO DISCUSS PROBLEMS
Before the World Federation of Diamond Bourses was to convene in Tel Aviv in late May, executives of the world’s major diamond exchanges and diamond manufacturers met with top people from De Beers Central Selling Organisation to go over the most pressing issues: profits, diamond treatments and prices.
“We discussed challenges facing the whole industry,” says Eli Izhakoff, president of WFDB and the Diamond Dealers Club of New York. “We agreed we could meet most of the challenges facing us by working together and heading them off before they become insurmountable.”
One of the most difficult problems is low profits for dealers. The reason: the retail and consumer ends of the pipeline have been unwilling to go along with a price increase that De Beers’ Central Selling Organisation imposed on larger goods late last year despite the scarcity of carat-plus diamonds in the market. As a result, prices of polished diamond haven’t risen in tandem with rough prices.
Dealers serving the U.S. and Japanese markets say retailers are resisting paying higher prices. In turn, this has squeezed the dealers who are caught between the sightholders and the retail markets.
Industry confidence and the fracture-filling issue are intertwined, says Izhakoff. And he stresses the importance of dealing with both issues now to head off credibility problems in the future. WFDB already has passed sanctions – including heavy fines and expulsion from the organization – for members who fail to disclose fracture fillings in diamonds they sell.
WFDB may seek even tougher sanctions, says Izhakoff. But more importantly, he says, the organi-zation will try to support research efforts by De Beers and others to develop an easy detection device for all levels of the diamond pipeline – even for use with mounted diamonds.
Meanwhile, there was a possibility that manufacturers attending the congress would try to bring an even stronger measure to the floor for a vote: disallowing use of the term “clarity-enhanced” to describe fracture-filled diamonds. “This term is a problem because it implies that an enhanced diamond is better than one which is not enhanced,” says Jacques Roisen, outgoing president of International Diamond Manufacturers Association.
Izhakoff says requiring disclosure isn’t the only answer. “There will always be those who try to cheat,” he says. “The only way to truly maintain consumer confidence is developing a device that can detect filled and synthetic diamonds quickly and easily.”
On a recent trip to China, for example, Izhakoff found that many fracture-filled diamonds were being sold without disclosure. This can create problems all over the world: “First, the Chinese government may act against diamonds if too many consumers are defrauded – and that’s one of the world’s most promising markets,” he says. Second, many of these diamonds could be set into jewelry, then reexported to the U.S. or other countries, creating problems in those markets as well.
BARRY’S IS FIRST NATIONAL JEWELER ON THE INTERNET
Barry’s Jewelers, Modesto, Cal., in April became the first national retail jeweler to open a site on the Internet’s World Wide Web.
Barry’s, which has 161 stores in 17 states and is the fourth largest U.S. jeweler, decided to create a Web site late last year. With the Internet mushrooming daily with new users, vendors and services, “it would be foolish to overlook this opportunity,” says Delmar Stuermer, vice president of management information services. He also admits one of Barry’s goals was to be the first national jeweler on the Internet.
Stuermer and his staff studied many Web sites and worked closely with a Canadian page designer to create the “look” of the site. The computer information was compressed and the colors were limited so the site downloads quickly, he adds.
The cost to create the site was less than $10,000 and annual maintenance is a few hundred dollars. “We wanted to establish ourselves now before costs begin going up,” he says.
The site features information about Barry’s stores (including a map and locations), Jewelry Online, a What’s New section (including new openings, sales and a contest) and a description about Barry’s and its services. Users also can link up to the NASDAQ Web site for information about Barry’s stock.
In its first few weeks, Barry’s Web site attracted 2,500 “hits” (the number of times computer users actually logged on to the site), and at least 500 read all the site’s pages. Users are encouraged to fill in an information form in order to enter a monthly contest for a diamond and pearl ring. Barry’s will use the forms to gauge the age, sex and merchandise preferences of people who visit the Web site.
Barry’s didn’t offer merchandise for sale initially. But when that became users’ top request, the company arranged through a “select group” of vendors to offer jewelry ranging from $200 to $500 retail. Barry’s will ship anywhere in the U.S. and promises next-business-day delivery.
Stuermer says the site will be evaluated and tweaked over the next six to 10 months based on viewer use and response. The site is located at http://www.barrys-jewelers.com/. – by William George Shuster
JEWELERS SAY SEMINAR MISREPRESENTED THEM
Several prominent jewelers have complained and at least one threatened a lawsuit charging that their names were used fraudulently to promote an estate jewelry symposium to be held in July in New York, N.Y.
An attorney for jewelry designer Henry Dunay says in a letter to Jerry Goldfarb, executive director of the Society for Antique & Estate Jewelry Ltd., that Goldfarb infringed Dunay’s trademarked name, violated his right of publicity and practiced unfair competition when he listed Dunay in promotional literature as a speaker at a symposium to be held July 17-21 in the Waldorf-Astoria Hotel. Attendees pay $495 each if they register before June 14, $595 after that date.
Dunay threatened to file suit against Goldfarb when initial attempts to remove his name from the pro-
motional literature proved fruitless, says Linda Goldstein, Dunay’s wife and industry marketing consultant.
Goldfarb says speakers often agree to speak nine to 10 months in advance and later change their plans. Last October, he says, members of his organization received indication that Dunay would speak at this year’s seminar. “He changed his mind, but that’s OK,” says Goldfarb. Dunay says he never agreed to speak at the seminar. His company sent an “open letter to the trade” to notify potential seminar attendees that he will not be there and that his name was used without his consent. In a followup mailing in mid-May, Dunay’s name had been deleted from literature about the seminar.
Adam Heyman, vice president of Oscar Heyman & Bros. New York, N.Y., also was listed as a speaker. “I never told him I was going to speak, and the use of my name is totally unauthorized,” he says. Heyman says Goldfarb asked him to speak months ago. “I told him absolutely not,” he says. Heyman says Goldfarb promised to remove his name but had not done so in the mid-May mailing.
Taryn Miller, jewelry department head at Butterfield & Butterfield in San Francisco, also is listed as a speaker. Miller says she didn’t agree to speak and will not attend.
According to several sources, a number of well-known estate jewelry experts were listed as speakers in promotional literature for last summer’s conference (also held in July at the Waldorf-Astoria) who never appeared at the event. These included Edmond Chin, jade expert at Christie’s; Mikhal Piotrovsky, director of the Hermitage Museum in St. Petersburg, Russia; Linda Morgan, an antiques dealer in London; Kiachi Takahashi, senior vice president of Mikimoto; and author Ben Zucker. It is not clear whether these experts agreed to appear. Goldfarb says Piotrovsky and Chin agreed to speak but then didn’t attend. “Piotrovsky just never showed up, and Mr. Chin called from Switzerland to say he couldn’t speak,” says Goldfarb. “We tend to call speakers in early July to reconfirm whether they will speak. If they can’t, we get a substitute.”
Elise Misiorowski, research librarian at the Gemological Institute of America, spoke at last year’s seminar and says attendees received revised schedules at the conference noting several speakers would not appear. However, Piotrovsky, a major draw for many of the attendees, was listed as a speaker until the day he was scheduled to appear, she says. “I learned a lot from the variety of seminars I attended,” she says. Overall, she notes that many attendees, including herself, enjoyed the seminars but were disappointed that many of the advertised speakers did not appear.
Another speaker, Janice Mack-Talcott, director of education/development for the American Gem Society, says last year’s program was enjoyable and informative. She will cochair the 1996 conference with Michael Coan, professor of gems and jewelry at the Fashion Institute of Technology.
Goldfarb’s seminar will be at the same time as the unrelated 17th annual Antique and Period Jewelry and Gemstone Course in Maine (see JCK, April 1996, p. 208).
INSURER GROUP CRITICIZES GIA APPRAISAL COURSE
The Insurance Bureau of Canada, a trade group representing property and casualty insurers, has taken issue with the Gemological Institute of America’s new “Insurance Replacement Appraisal” correspondence course and has called on GIA to withdraw it.
In a critique of the course sent to GIA President William E. Boyajian, IBC Senior Counsel Randall J. Bendus says the course is informative but “contains contradictions and errors which do not lead to reliable insurance appraisals.”
Boyajian disagrees strongly with the trade group’s assessment. “We think this is an overreaction,” he says. He has no intention of withdrawing the course and is creating a point-by-point response to IBC’s letter. (The response will appear in the July issue of JCK.) He says GIA took two years and consulted numerous industry experts to research material for the course and is proud to offer it to educate thousands of students about the basic issues of insurance replacement.
Bendus says he feels “GIA is jeopardizing its excellent reputation with the insurance industry” and adds that in addition to withdrawing the course, GIA should withdraw any certificates issued already.
Among IBC’s objections:
The course has no prerequisites.
Sample appraisals lack data on cuts, setting and workmanship.
The text recommends assumptions based on “common practice.”
Noting a differentiation in requirements for after-market appraisals as opposed to a point-of-sale appraisal.
The text says even store managers who aren’t buyers and pricers can perform appraisals, contradicting earlier statements that appraisers should have a broad range of experience in buying and selling gems.
Promotions within the course text of GIA books, videotapes, classes and other products for sale.
An emphasis on attractive rather than utilitarian reports.
A recommendation that if an appraisal cannot be provided, the jeweler provide a detailed sales receipt and call it “Replacement Price Report for Insurance Purposes.”
“Disregard of the insurer’s position.”
Boyajian says GIA offers a certificate of completion for those who have passed the course and vigorously opposes any misuse of credentials. He notes that no diploma or title is granted for the course.
ZALE WANTS WEDLO’S LEASED DEPARTMENTS
Zale Corp. has made an offer to buy the 26 leased jewelry departments that Wedlo operates in the Parisian department store chain, according to informed sources. If the deal goes through, the leased departments probably would join Zale’s Diamond Park division, which now operates 188 leased departments in stores around the country.
Parisian Inc., based in Birmingham, Ala., is a family-owned Southeast department store chain.
Negotiations between Zale and Wedlo were still going on at press time. However, the sale was expected to be completed by early June, pending approval of U.S. Bankruptcy Court. Wedlo filed for protection from creditors in February under Chapter 11 of the U.S. Bankruptcy Code (see JCK, March 1996, p. 18).
Barring any changes, it would be the second acquisition Zale has made recently. In late 1995, the company bought the Karten’s Jewelers chain in New England.
Wedlo, which also owns Lorch Diamond Centers, had planned to sell its highly successful Parisian leased departments even before the Chapter 11 filing as part of a refocusing and downsizing project.
Meanwhile, Wedlo was expected to present a reorganization plan by May 22, though there was a possibility the date would be pushed back. Wedlo reportedly was considering several options, including selling the company. However, Wedlo officials say they’re optimistic the company will survive the reorganization, which is expected to last most of this year.
BALFOUR OFFERS RANGE OF OLYMPIC JEWELRY
Balfour Co., the officially licensed maker of precious metal products for the 1996 Summer Olympic Games, is offering contemporary jewelry at every price point. Pins with sporty, mostly unisex styling, are the focus of the collection; all pin styles are numbered limited editions.
The centerpiece is a limited edition of 10 sets of five pins in 18k white and yellow gold with 2-plus-cts. of diamonds each and a selection of emeralds, rubies and sapphires combined with pictograms and logos. They’re available exclusively at Saks Fifth Ave. Each set comes in a mahogany collector case with certificate of authenticity for $50,000; individual serialized pins are $10,000 each.
The themes of this set are echoed throughout the Olympic collection, which is being featured at department, specialty and sporting goods stores nationwide. Other series include a limited-edition collection of four 14k gold and diamond pins ($600-$2,400 retail); nine 14k gold designs in limited editions of 1,000 each ($240-$500); a fine jewelry group ($15-$500); sterling silver pin category ($40-$60); and a line of Olympic commemorative coin jewelry ($60-$999).
COURT HALTS PRODUCTION OF PRIME BAGUETTE GEMS
A district court in Tel Aviv-Yaffo, Israel, granted an interim injunction against Levi and Itzhakov, the producer of Prime Baguette gems, which are sold in the U.S. under that name.
Merit Diamond Corp., New York, N.Y., and Israel, filed a claim in Israel against Levi and Itzhakov for marketing the gems, which it says breach its design rights to the type of cut used. Merit markets its gems with this cut in the U.S. under the name Royalcrest. The injunction halts production of Prime Baguettes until the case is decided in court.
STERLING POSTS 39% GAIN, PLANS MORE JARED STORES
An “excellent performance” by Sterling Inc. helped its parent company – Signet Group PLC of London – to post a 39% gain in pretax profits for fiscal 1996.
Sterling itself posted $70.2 million in operating profits (up 39%) on sales of $854 million. Comparable-store sales rose 3% for the year and 10% for the eight weeks before Christmas. Operating margins rose from 5.9% to 8.2%.
During the year, Sterling welcomed Terry Burman as president. Burman, formerly president of Barry’s Inc., filled a vacancy created by the resignation of Nathan Light earlier in the year. Burman undertook an overhaul of operations and objectives, which the year-end report credits with boosting profits.
This spring, Vice President Joe Freedman led a review of Sterling’s Jared superstore program. As a result, the company decided to open up to 35 more of the freestanding Jared stores in the next few years. But the new Jareds will be smaller (6,000 instead of 10,000 sq. ft.) with somewhat less inventory than the first Jareds.
Signet’s year: The Signet Group posted overall pretax profits of $38.5 million, nearly triple the 1995 total. The increase was due principally to Signet’s performance, says the year-end report.
In the United Kingdom alone, (433 stores in the general market H Samuel chain and 167 stores in the upscale Ernest Jones chain), Signet had $41 million in operating profits in fiscal 1995, a 15% gain.
Despite progress in 1995, Signet has a net debt of more than $470 million. It owes more than $100 million to U.S. preference stockholders and its interest charges amounted to $60 million in 1995. Signet’s directors have said reducing that debt is a priority and selling the U.K. operations is a possibility. Sterling won’t discuss possible bidders or a sale price, but published reports in Great Britain estimate it could be US$450 million to $460 million.
Goldsmiths, a British jewelry chain, said it made a bid for Signet’s U.K. operations, but no decision had been made at press time.
Sources expected a sale to be completed by summer so the new owner could prepare for Christmas.
CODE ISSUE DELAYS SALE OF GIA BUILDING
The sale of the Gemological Institute of America’s classroom building in Santa Monica, Cal., has hit a temporary snag because the building may not meet new state codes for schools.
Santa Monica College has agreed to buy the building for $8.8 million. But inspectors must first make sure the building meets handicapped-access and other state codes, which are much stricter for schools than for other buildings.
The inspectors may take several months to determine what, if anything, should be done.
GIA is building a new $40 million campus in Carlsbad, Cal., and plans to complete its move there by late 1997. GIA is still searching for buyers for the Santa Monica buildings that contain its Gem Trade Lab and research facilities.
FRENCH LUXURY GROUP BUYS FRED JOAILLIER
Fred Joaillier has been sold to Moet Hennessy Louis Vuitton (LVMH), a luxury retail group headquartered in Paris. LVMH bought 71% of FRED in June 1995 and the rest this past April.
Henri Samuel, whose family had owned the exclusive jewelry chain, stepped down as chairman and president. He was succeeded by Philippe Clin, formerly managing director of the fragrance division of Sanofi Beaute, a division of Van Cleef & Arpels, who had spent 10 years with the Cartier organization.
Under LVMH, FRED Joaillier’s emphasis will be on the U.S. and Asian markets, with up to 10 more stores being added in the next few years. FRED already operates salons in Beverly Hills and Costa Mesa, Cal.; Houston, Tex.; Paris, Cannes and Deauville, France; Monte Carlo; and Toyko, Japan.
Plans also call for new product lines and greater exposure in the luxury retail industry.
LVMH brands include Moet and Dom Perignon champagne; Hennessy cognac; Louis Vuitton luggage and leather goods; Christian Dior, Givenchy, Kenzo and Guerlain perfume and cosmetics; and Givenchy, Christian Lacroix and Kenzo apparel.
PRESIDENT OF JAN BELL RESIGNS
Joseph Pennacchio resigned May 6 as president, chief executive officer and director of Jan Bell, Sunrise, Fla., the country’s second largest operator of leased jewelry departments. He had held the posts since May 1994.
Jan Bell operates 437 leased jewelry departments in the Sam’s Club store chain; these provide about 91% of Jan Bell’s business. It also has trading and manufacturing operations in Israel and recently launched a chain of fine jewelry superstores and a chain of outlet stores.
Pennacchio, formerly president of Jordan Marsh Department Stores, joined Jan Bell after it switched from a wholesale to a retail operation to oversee the turnaround. In mid-1995, the company solidified its finances with a two-year $30 million working capital loan, part of which reduced its debt burden. Late in the year, Jan Bell opened its first Jewelry Deport superstore and two Jewelry Deport Outlet stores (see December 1995 JCK, p. 18).
Issac Arguetty, chairman of the board and a cofounder of Jan Bell, has assumed the duties of CEO and has begun a search for a chief operating officer to help him in positioning the company for the future.
Jan Bell’s other operations include Regal Diamonds International, a diamond trading operation, and Exclusive Diamonds International, a manufacturer, both in Israel. The company also has a joint venture with Big Ben Corp. to market select brand-name watches.
A photo caption in “Tourmaline and Tanzanite: The Terrific Twosome” (JCK, May 1996, p. 118) lists the incorrect city for The Rothenberg Collection. The company is based in Van Nuys, Cal.
L. LURIA & SON POSTS $19 MILLION LOSS
L. Luria & Son, a jewelry and gift retailer based in Miami Lakes, Fla., posted a net loss of almost $19 million for the fiscal year ended Feb. 3. That’s about $5 million more than officials had predicted earlier this year and compares with a $155,000 gain in fiscal 1995. Sales totaled $173.3 million, down almost 18% from last year.
In the fourth quarter alone, the company suffered a net loss of $10.8 million on sales of $70.4 million. This compares with a gain of $3.5 million on sales of $86.4 million for the fourth quarter of the previous year.
L. Luria was once a major catalog showroom retailer, but is shifting its focus to superstores specializing in jewelry (40% of its business), giftware and kitchenware. The company closed seven showrooms and discontinued its annual catalog in fiscal 1995.
Executives blamed the weak 1995 results on having fewer stores, softening demand in catalog showroom stores, strong competition in general merchandise categories and a generally weak retail environment.