GOLD JEWELRY SALES RISE

Gold jewelry sales totaled $6 billion in the first three quarters of 1995, up 5.9% from the same period of 1994, says the World Gold Council.

At this pace, says the council, sales were poised to exceed the 1994 total sales volume of $11.3 billion. (The fourth quarter traditionally accounts for more than 40% of gold jewelry sales.)

For the third quarter alone, gold jewelry sales rose 5.1% by value and 4.7% by units over the same period of 1994. It was the 16th consecutive quarter of sales increases, says the council.

“Despite an overall sluggish retail environment, gold jewelry has been a strong performer,” says Michael C. Barlerin, the council’s chief executive officer.

Who’s selling: Sales were up in all retail channels in the first three quarters. Discount stores remained the fastest growing retail outlet, easily outpacing the category average with a 15.8% increase in value in the first nine months of the year over the same period of 1994. Discount stores also continued to gain market share, accounting for 12% of gold jewelry sales by value, up from 10.9%.

Independent jewelry stores matched the category average of a 5.9% increase and maintained their 25.2% share of the market.

Department stores posted a 5.7% increase in value and maintained their 20.3% share of the market.

Chain jewelry stores performed below the category average with a 4.9% increase. They comprised the largest distribution channel, though their share of gold jewelry sales slipped slightly from 28.9% to 28.6%.

Catalog showrooms had a 0.7% increase in sales volume; their share of the market fell from 14.7% to 14%.

What’s selling: Sales were up in all merchandise classifications. Gold neckchain sales rose 3.2% in value, down from 3.4% in the same period of 1994. They also lost market share, falling from 42.2% to 41.2%, but they remain the largest classification of gold jewelry by value.

Sales of earrings and charms experienced the most growth for the second consecutive year, up 13.9% and 12.6%, respectively. Earrings, the second largest classification, boosted their market share from 11.4% to 12.3%. Charms, the fifth largest classification, saw market share rise from 7% to 7.5%.

Sales of wedding rings, the third largest category with a 10.7% market share, recorded a 5.5% dollar increase.

Bracelets accounted for 10.6% of the market and had a 6.2% increase.

Non-wedding rings and non-chain necklaces outperformed the category average with sales gains of 7.1% and 6%, respectively. The rings accounted for 8.5% of total volume; non-chain necklaces were the smallest classification with 3.1% of the market.

The information is based on sales reports from a national panel of more than 4,000 retailers in all major classes of trade. It comprises sales of jewelry in which the primary value is in the gold content, including jewelry with accent stones and excluding watches. (For more details on the gold jewelry market and how you can profit from it, see Grow With Gold, a special-focus issue of JCK mailed along with this regular March issue.)

SHOPPING LOSES ITS LUSTER

Rampant discounting and changing lifestyles have hit U.S. retailers hard. In the midst of it all, America seems be losing its urge to shop.

That’s the consensus of retail analysts interviewed for an article in the Financial Times, a London newspaper that examines business on an international level. “The recession is a distant memory,” says the article. “The stock market has surged, unemployment is down and disposable income is up. Yet something is amiss.”

One reason, say the analysts, is the Baby Boom generation. These conspicuous consumers of the 1980s are now saving for their kid’s college tuition, nursing home care for elderly parents and their own retirement.

Corporate downsizing is another reason. While salaries are rising for those who have jobs, nearly everyone knows someone who has been laid off or has been laid off themselves, creating a collective insecurity.

In addition, increased workloads at the office and at home are cutting into consumers’ leisure time.

To attract consumers, many retailers have resorted to relentless price-cutting. In turn, consumers now expect sale prices before even considering a purchase.

This combination of fewer sales and lower margins is strangling some big-name mass merchandisers. Caldor and Bradlees have sought bankruptcy protection, Kmart’s debt rating suffered after it reported a third-quarter loss of $118 million and even Wal-Mart – the nation’s biggest retailer – faced a possible downgrade of its $8.9 billion debt at press time.

Mass merchants aren’t the only ones with problems. The number of specialty retailers – including jewelers – has exploded in the past decade and led to the “overstoring” of the U.S. This excess of stores was reduced when some went out of business during the recession of 1990-’91. But many retailers sought bankruptcy-law protection while they reorganized and then went on with business, leaving still too many stores. Now analysts say the U.S. is ripe for more bankruptcies.

For jewelers, this will be a telling month as they balance payables and receivables coming due from Christmas – and as consumers worry about the economy. But analysts interviewed for the Financial Times article do offer some encouraging news. The fact jewelers were so far ahead of most other retailers at Christmas proves they have two characteristics that weary shoppers want:

• They sell products of perceived lasting value.

• They sell products associated with lasting love and romance instead of instant gratification.

THAI ONE ON

Thailand is seeking to boost its reputation among U.S. consumers as a jewelry source.

The centerpiece of the effort is a “Jewels of Thailand” promotion hosted by various types of retailers across the U.S., including Saks Fifth Avenue, Montgomery Ward, Sears Roebuck & Co. and the Home Shopping Network. In November, Thai officials even visited a Saks Fifth Avenue store in Boston that was hosting the promotion to give their blessing.

The promotions include point-of-purchase materials, jewelry gift boxes, gift-with-purchase (a goldplated pendant depicting an elephant – a good luck symbol in Thailand), a sweepstakes (trip for two to Thailand) and radio and television spots. They were developed in conjunction with Town & Country of Chelsea, Mass., which the Thai jewelry industry hired as a consultant in 1994.

BYE BYE BABY

If you’ve had a tougher time with baby and bridal gift sales in the past few years, a new report from the U.S. Department of Health and Human Services may help you to understand why.

Between 1991 and 1994 (most recent figures available), births fell 19% to 3.98 million and marriages rose only 0.4% to 2.36 million (in fact, marriages declined 1% in 1993).

The combination of fewer births and only slightly more marriages overall means jewelers who sell gifts for both occasions have to market more aggressively (persuade shoppers to buy gifts from them rather than department or other specialty stores), merchandise effectively (stock fine gifts and jewelry in a range of styles and prices) and sell knowledgeably (consumers want to know they’re getting a good value for a gift that will last until the baby grows into adulthood and the bride and groom celebrate their golden anniversary.