"Be a Winner”
Despite the Recession
This issue of Retail Jewelry Insights™ is the first of a four part series focused on the long term consequences of the recession on retail jewelers and how jewelers can reposition their businesses for greater success in 2009. Part I will focus on sales expectations, cost restructuring, and automation. Part II, Vendors role in optimizing business performance, Part III, will look at marketing, and Part IV will consider the role of competitive analysis and market share management in build sales...
Part I: Sales Expectations, Cost Restructuring, and Automation
Worst Fears Realized
While most retailing sectors experienced a decline in sales during the holiday season, the $65 billion jewelry industry was hit the worst as frightened consumers abandoned traditional buying habits. The jewelry industry got its first solid evidence of just how bad sales were when Tiffany, Finlay, Zale, and Signet reported sales results. For the period between November 1st and December 24th like-for-like US jewelry sales declined 35%, 24%, 22%*, and 15.5% respectively for these four leading public jewelers. The results quantified an earlier survey by the National Jeweler in which 80% of respondents said sales decreased by more than 10% during the season.
The effects are just being realized in the market. Christian Bernard was the first jewelry chain to file for bankruptcy in the New Year. Weeks later, the court appointed The Gordon Company of Ft. Lauderdale, FL to manage the liquidation of the 15 store chain. Subsequently, Shane & Co filed for bankruptcy stating it would reorganize in 12 months, a time when the recession may be the most severe. Most recently, the court approved the liquidation of Fortunoffs assets just weeks after the luxury jeweler and retailer filed Chapter 11. What is now certain; more jewelers will fail unless management acts to rethink business plans for 2009...
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