JA Annual Cost Of Doing Business Survey: A Comparison of Results
October 11, 06
Retailers’ overall sales growth dropped to an estimated 3.9% in 2005, versus 6.1% in 2004 according to Jewelers of America analysis of member stores’ financial data from 2005.
The JA 2006 Cost of Doing Business Survey found that while overall median sales growth dropped, all store categories experienced some level of growth. Chain stores and independent high-end stores saw the highest growth at 4.9% and 4.4% respectively, while independent mid-range stores experienced 2.5% growth.
Store profitability inched upward to 4% in 2005 (it was 3.9% in 2004 and 4.4% in 2003). Gross margins were down slightly - 48.4% in 2005, compared to 49.2% during 2004 – and are at their lowest point since 2000’s 47.4%.
Diamonds continue to represent the greatest share of sales, with diamond jewelry accounting for 33% and loose diamonds representing 15%. Colored stone jewelry (10%) and karat gold (9%) provide the other two largest shares of retailers’ sales.
The survey also shows that customer service does pay off, as repairs bring in 10% of sales for retailers (up 1% from 2004). Sales of timepieces (5%) have stabilized – and even increased slightly.
| Comparative Income Statement For 2006 |
“The JA Cost of Doing Business Survey is a unique and necessary tool for retail jewelers looking to be competitive in today’s complex market,” says JA President and CEO Matthew A. Runci. “Store owners and managers can pinpoint their strengths and weaknesses and, in doing so, evaluate and hopefully improve company performance.”
JA compiled the data from a cross section of retail jewelers: 27.8% responded from independent high-end firms; 56.9% from independent mid-range firms; 6.1% from designer, artist, custom firms; and 6.4% from chain stores.