E-Commerce. Archives
On-Line Sales Increasing.
Smith Barney predicts annual online sales growth of 15 to 20 percent for the next few years and 10 to 15 percent over the next 5 to 10 years.
Online Jewelry Sales Soar!
Just in From Rap.:
Online Jewelry sales were up a dramatic 113 percent to $1.9 billion, the largest increase of any retail category in the 2004 holiday selling season.
Online retailer amazon.com included jewelry and watches on its "best of 2004 list" - the top-selling, most positively reviewed, most wished for and the most favorite gifts as determined by its customers in 2004.
Why are online jewelry sales so strong? Experts say that the sharp rise in broadband usage is behind soaring jewelry sales. Broadband internet allows retailers to post "richer" diamond and jewelry pictures that really let you "see" what you are buying. The fact that many diamond wholesalers, vendors, and retailers, are now forced to showcase their diamonds and jewelry to internet savvy consumers with real data and information, has also helped boost consumer confidence in online jewelers.
Hispanic Jewelry Market Key Group For Retailers.
U.S. Hispanic consumers are willing to spend large amounts of money on jewelry, according to a recent online poll by the Jewelry Consumer Opinion Council (JCOC). That could mean big business for retailers, considering there are 39 million Hispanic consumers in the United States, a number that continues to grow.
The study finds that 75 percent of respondents already own fine jewelry, and more than half of them will spend more than $500 on fine jewelry purchases in the next few months.
Hispanic consumers represent the fastest growing group in the country, and their jewelry buying habits indicate that their love for fine jewelry will mean significant growth this year and in the future, according to the Jewelry Council.
The study finds that Hispanic consumers have a high interest in religious jewelry, but that they also desire diamonds and fashion jewelry.
Internet Shopping Exploding!
Internet shopping exploded dramatically this past holiday season (2004). VeriSign Inc., a prominent e-commerce network provider, announced that it processed transactions worth $12 billion between November 1 and December 31, 2004, up 88 percent from $6.4 billion during the same period in 2003. Transaction volume grew by 39 percent year-to-year.
Shop the Internet with Confidence.
In its fifth edition of the VeriSign Internet Security Intelligence Briefing (ISIB,) the company attributed the increase to broadband access, the availability of inexpensive goods on the internet, and an increase in trust with Internet security.
Online merchants also reported a drop in the number of transactions they categorized as too risky to complete, down to 6 percent from 7 percent in 2003. Although security continues to be a prime concern for both consumers and merchants, fraudulent transactions only accounted for 2 percent of all purchases.
Countries to watch out for were Romania, Vietnam, and the United States as the top source countries for total volume of e-commerce fraud during the 2004 holiday period while Belarus, Slovenia, and Vietnam were the top countries for internal percentage of fraudulent transactions.
This report by Verisign is confidence-building news for consumers who might still be hesitant in shopping on the Internet. Advanced encryption technology safeguards credit card information provided over the Net and individual companies membership in organizations such as Truste insures safeguarding and confidentiality of your personal information.
"Tsunami" In the Form Of Weak Dollar Hurting Jewelers.
Rapaport Trade Wire reports today that the rapidly sinking U.S. dollar is taking its toll on the jewelry industry. Profits are being squeezed for both jewelry retailers and suppliers and in some cases, merchants are reporting losses on business transactions denominated in U.S. dollars.
Several retailers like Kay and Zales are fighting back by cutting out wholesalers and buying directly from overseas jewelry and diamond producers, thus reducing the impact of the weak U.S. dollar.
This is causing great anger and ill will on the part of suppliers who now find themselves being squeezed out of the supply loop.
As jewelry costs rise, retailers have few choices. They can either raise retail prices or they can cut costs.
Most jewelers opt to cut costs before trying to raise prices. Internally, merchants have several methods of reducing costs including less store-level discounting, repositioning of the product line to higher-profit goods, cutting overhead expenses and having salaried personnel work longer hours.
Externally, jewelers can reduce their costs via direct sourcing with overseas manufacturers. This cuts out wholesalers and other middlemen who add costs.
Raising retail prices is extremely difficult in a highly competitive retail environment. During the all-important holiday selling season, many U.S. jewelers tried to raise the value of their average ticket — in other words, raise prices. However, this strategy proved to be unsuccessful; jewelry demand waned as consumers purchased less-expensive goods.
This problem is further exacerbated by the growing strength of the Internet, which serves to decrease in-store traffic and puts tremendous pressure on Brick & Mortar stores profit margins.
The bottom line is that jewelry wholesalers are being cut out of the pipeline at a rapid rate, and it is not inconceivable that in the very near future the jewelry industry will be dramatically transformed and resemble such industries as consumer electronics, Home centers, and Office supplies.
We are seeing before us the evolution and re-organization of the jewelry industry as Darwin's survival of the fittest takes hold. This "Scopes" trial won't play in Peoria but surely consumers will benefit by the resultant competitive and excellent pricing.
Internet Mother's Day Diamond Sales Rise 101%!
Internet e-commerce tracker, VeriSign Inc., says that Mother's Day online purchases rose 24 percent from 1 year ago to $4.4 billion. VeriSign measured sales from April 25, 2005, through May 8. Jewelry purchases increased 79 percent. Diamond purchases rose 101 percent and the average diamond purchase was $517.
"Mother's Day has arrived as one of our larger retail holidays. Where once this holiday would have been acknowledged with a phone call and a heartfelt card, we're increasingly seeing people using it as an opportunity to send expensive items, such as a necklace pendant," said Trevor Healy, vice president, Payment Services, VeriSign.
VeriSign alone accounts for 37 percent of e-commerce transactions across the North American continent and services 135,000 online retailers.
Brilliancescope by Gemex: Anatomy of Diamond Light Performance.
Many consumers are constantly asking us for advice on their prospective diamond purchases.They list their candidates and provide the diamond's numbers off the Lab reports and in some cases list additonal Cut information derived from either the Sarin (www.sarin.co) or Megascope (www.ogisystems.com) machine.
For round brilliant diamonds it is easier to advise against purchase
when the numbers clearly indicate an overly shallow or deep stone that will display poor to mediocre light performance.
The difficulty presents when consumers provide "numbers" that look very good and/or ideal. The term "ideal" for the purposes
of this article is used in the context of the Marcel Towlkowsky Ideal-Cut, the "numbers" calculated by Towlkowsky
in the late 1900's to result in a diamond that displays superior light performance.
The Brilliancescope, manufactured by Gemex Systems (www.gemex.com) is an imaging spectrophotometer that measures how well a diamond refracts and focuses light.
Past all of the numbers, a diamond's beauty is the result of how it returns light to your eye. When a diamond's facets have been cut to the correct size, angle, and aligned correctly, they act as mirrors, refracting light with great intensity and with an even distribution across the entire surface of the stone.
Different Diamond Cut Configurations
Brilliancescope Machine by Gemex Systems (Mequon, Wisconsin).
The Brilliancescope measures light performance in a controlled lighting environment consisting of six lighting angles.
The machine provides an objective method of evaluating the intensity, distribution, and interaction of light output by measuring
light that is returned through the crown.
The technology used in the BrillianceScope was originally developed
by UGTS and LambdaSpec Instruments.
UGTS was the tech development division and LambdaSpec
was the Marketing section that licensed the technology.
Randy Wagner, at the time at UGTS was one of the original developers of the technology and was awarded the patent in 1996-1997.
Kurt Schoeckert came on board in 1998, They formed Gemex, Inc.
and bought all of the technology rights from UGTS and LambdaSpec.
All optics used in the Brilliancescope are off the shelf parts or custom made by major optics companies such as Rodenstock and CRI.
Whether or not her diamond ring grabs your attention will be determined by the Cut quality of the stone; the better the Cut, the greater the light performance.
The diamond ring moves and tilts as she moves her hand. This tilting changes the entry angle of light through the diamond's facets.
The BrillianceScope standardizes these movements by precisely changing the angle of the light source to illuminate the diamond.
The Brilliancescope has six lighting angles to measure the stone;
five positions are reflected light and one position is diffused light which also displays the level of the diamond's Cut Symmetry and Contrast. If the diamond cutter has aligned all of the facets correctly, they will act as 'mirrors' refracting entering light back to your eye with great intensity and with an even distribution across the entire surface area of the stone.
Approximately 800,000 diamonds to date have been evaluated and registered into the Gemex database to determine the range of light performance.
These Evaluation Scales are linear graphs that show how a specific diamond performs in relation to the industry standards for reflection performance.
The Brilliancescope is user friendly and easy to operate. The Operator must calibrate the Brilliancescope at a minimum of once a week or it will automatically shut down and prevent a diamond from being run.
The Operator must insure that the diamond is clean. No smudges, oil, or lint anywhere on the diamond's surface. The glass plate must also be inspected and cleaned of lint and smudges.
Next the operator places the diamond table
down onto the glass plate and makes sure that it is centered in the Bullseye.
The cover is now closed and light analysis performed.
This is the output.
The Operator fills in the ID data of the diamond, then clicks on the LPA/WEB button which sends the output directly to Gemex for evaluation. After careful review by Gemex engineers, the Operator receives e-mail notification regarding the submitted scans.
Approved gifs can be immediately downloaded and provided to interested consumers.
Rejected scans come with an explanation and
a request to correct the problem and re-submission.
The Brilliancescope measures three components of light:
1.white light,
2.colored light,
3.scintillation.
White light is the evaluation of the diamond's overall area in
returning bright white light from the crown from each of 5 reflectance lighting angles.
Color light looks at each lighting angle and determines where bright color light is returning from the crown.
Scintillation refers to changing colors,the sparkle of light rays coming from the stone when it moves and/or the light source changes.
Arrows below point to "freckles" and "rice krispies" which are on the diamond's periphery and indicate scintillation.
Operator clicks on the LPA button that sends the data to Gemex for inspection and review.
How is the output evaluated.
At Gemex Headquarters in Mequon, WI., GemEx engineers review these submitted scans for accuracy.
Each scan is screened for over 20 possible human errors and technical issues such as proper and timely machine calibration, clean diamond,
clean glass plate, and proper centering of the diamond, to assure that the scan is accurate. If human error or technical problems are found
the scan is rejected and the Operator immediately notified of the problem, asked to correct it, and then to re-scan the diamond.
If the scan is approved on the first go around, it is sent to a second check station and again reviewed for the same 20 + check list.
If it passes that final check, the report is printed and mailed to the Operator/customer. If there is no hard copy Light Performance™ Report,
you cannot be assured that the scan was put through these very important checks by Gemex, and therefore you
cannot assume that the results are accurate or repeatable. This is the reason that only GemEx can issue Light Performance Reports
and does not allow BrillianceScope users to unilaterally
provide scan results or print their own reports.
This rigorous screening system by Gemex assures that Brilliancescope results for all Operators are accurate, valid, and repeatable.
RESULTS:
Light Performance results are depicted in two ways: 1. Bar graphs, and 2. Five light views and one view in diffused light showing symmetry and Contrast.
One criticism leveled against the BrillianceScope is that it does not provide easy to understand number results. This is not true.
The first prototype of the BrillianceScope did indeed use a number scale of 1 to 10. Consumers responded by asking for scores that were
visually indistinguishable from each other such as a 9 versus an 8.5
(Both are in the Very High cataegory).
Gemex therefore decided to abandon the number scale
and instead use bars because
light performance is a continuum not a stepped sequence.
A 9.3 is not visually discernable or necessarily superior to that of a 8.8.
Number results are provided by the Brilliancescope and can only be seen by the Operator via a special click-through.
Both White light and Color light data are calculated in terms of percentages.
A percentage of area returning
white light is calculated and used to determine
where on the scale this diamond scores compared
to other diamonds of the same shape.
Results from the Brilliancescope are repeatable within a very useful range which is the width of the bars on the scales.
The analogy is to two race cars; one traveling at 100 MPH, the second at 105 MPH. Your eye cannot discern +/- 5 MPH.
On the other hand, slight changes in the numbers make it appear as if
the score is not repeatable. For example, a score of 8.8 versus 9.3 would be seen by a consumer as being qualitatively
different with an attached value of "good" versus "better".
Your eye can not pick up these tiny percentages of variation.
Comparative measurement avoids this problem.
The 5 light views show you the intensity, distribution, and interaction of the measured light components. Light view 6 shows Symmetry and Contrast under diffuse light conditions.
Contrast (Black Areas) under Diffuse Light as well as Symmetry are shown in Light View 6. Note the excellent contrast in the 60-60 diamond which has a facet alignment significantly different from that of an Ideal Cut round diamond.
Here are the informative Brilliancescope results and Cut data for this 60-60 diamond.
One of the criticisms leveled against the Brilliancescope by certain Ideal Cut companies is that their diamonds do not perform well
because the machine tends to favor certain "brands" over others. This is not true.
The Brilliancescope is an equal opportunity evaluator and evaluates light performance based on proper facet alignment, facet size, and
facet angle. The results from this 60-60 diamond clearly illustrates this fact.
Why Light Performance and Not "Numbers" Are Key.
In a previous article posted to www.diamondtalk.com we have stressed the importance of light performance over the "numbers"
in determining a consumer's diamond purchasing decision.
The article is here:
Diamonds and Gemex
We agree with our colleagues that "seeing is believing" and
we always advise consumers to make every effort to physically "see" and compare as many diamonds as possible in order
to make an informed buying decision.
It is our opinion based on working intensively with Gemex and the Brilliancescope over the past four years, that this
technology is currently the very best available to give consumers accurate information on a diamond's light performance.
eBay Sets Revenue Records!
During its second quarter of fiscal year 2005, Internet auction powerhouse eBay Inc., logged $1.5 billion worth of jewelry and watch transactions. According to eBay's quarterly statement, the website has 157 million registered users.
The company itself recorded a 40 percent increase in corporate revenues from 2004 to close second quarter at $1 billion on June 30, 2005. Operating income rose 49 percent to $379 million, and eBay earned $292 million, or 21 cents per share.
On-line Shopping & Sales Increasing!
An increase in the number of female shoppers will contribute to 14 percent of jewelry sales moving online by 2010, according to a new forecast from Forrester Research released Monday.
Last year, it was estimated that 5 percent of jewelry sales were occurring online.
But jewelry is just part of a retail online picture which is growing even faster across the board, according to Forrester. Thanks to innovations that will make online shopping simpler and more engaging, online retail sales will nearly double within five years—from $172 billion in 2005 to $329 billion in 2010, according to the report. That increase includes a 14 percent compound annual growth rate over the next five years.
"Businesses are debating their online strategy. Many believe they became too focused on sales. Now they're looking at their Web sites as a way to drive in-store traffic and increase their engagement with customers," said Forrester Research Vice President Carrie Johnson in a release. "This is a huge shift in philosophy, as e-commerce enters a more sophisticated phase. But it's also creating tension, as CEOs demand ROI for expensive Web sites with hard-to-define metrics, such as loyalty and brand."
Since more and more mainstream consumers are already shopping online, retailers are investing in improved online shopping experiences by using state-of-the-art technologies, such as sophisticated analytics and personalization tools.
Other highlights from the Forrester report:
-E-commerce will represent 13 percent of total U.S. retail sales in 2010.
-Travel remains the largest online retail category, growing from $63 billion in 2005 to $119 billion in 2010.
-General merchandise (all retail categories, excluding food and beverage, auto and travel) will top $100 billion for the first time in 2005.
-Online sales of health and beauty products will grow at an annual rate of 22 percent.
-Twenty-nine percent of small appliance sales will migrate to the Web by the end of the decade, as a generation that grew up with the Internet marries and attends weddings.
-Categories showing significant growth (i.e., growth outpacing the overall 14 percent compound annual rate) include: apparel, consumer electronics, health and beauty, food and beverage, home products and sporting goods.
The $329 billion Forrester projects for online retail sales for 2010 represents a minor downward adjustment from its 2004 forecast.
Ernst & Young Predicts Challenging Season for Retailers.
Rising distribution costs that resulted from Hurricane Katrina will deliver a hit to retail spending this holiday, but consumers will still pursue luxury products, the Ernst & Young Consumer Trends Center said in a preliminary report released today.
The firm expects holiday sales increases for November and December to be 6 and 7 percent this year, compared to an 8.3 percent increase for the same period last year.
"It will be a challenging holiday season for most retailers, but many have back-up distribution plans and inventories that will help them cope with the effects of Hurricane Katrina," said Jay McIntosh, Americas Director of Retail and Consumer Products for Ernst & Young LLP. "To bolster traffic and sales, retailers will begin promoting earlier in the season and promote more frequently and aggressively than originally planned." Luxury items such as diamonds and jewelry, due to the growing luxury trend will continue to appeal to shoppers, and higher gas prices likely will boost Internet sales.
Ernst & Young issues a final holiday forecast in early November.
Ebay Jewelry Sales Surging!
Third-quarter sales of jewelry through online auction house eBay totaled $1.6 billion for the third-quarter ended Sept. 30, the company announced Wednesday.
Gross sales across all trading platforms for the third quarter ended Sept. 30 totaled $10.8 billion, a 30 percent increase from the $8.3 billion reported in the third quarter last year. Other categories to break the $1 billion sales mark for this third-quarter were: eBay motors at $14.1 billion; clothing and accessories at $3.1 billion; consumer electronics at $3 billion; computers at $3 billion; books, movies and music at $2.5 billion; home and garden at $2.4 billion; sports at $2.1 billion, collectibles at $2.1 billion, business and industrial at $1.5 billion; toys at $1.5 billion and cameras and photo at $1.3 billion.
The number of registered eBay users increased 35 percent for the quarter, reaching a total of 168.1 million people. The company reported 458.6 million new listings for the third quarter, marking a 32 percent hike over the same period last year.
PayPal, the online payment company owned by eBay, reported a total of 86.6 million accounts for the third quarter, increasing 53 percent over the same period in 2004. PayPal handled $6.7 billion in payments for the period, a 44 percent increase over last year.
Our advice: If you're buying diamonds on Ebay, make sure that they have either a GIA (Gemological Institute of America) or AGS (American Gemological Society) grading report. These are the two best diamond grading laboratories in the business. Their accuracy, stringency, and consistency is unequalled. Stay away from other grading "labs".
Check out the stores examination/review periods and Return/Refund Policies to make sure you have enough time to get the merchandise independently appraised and returned/refunded if you so desire.
What information is the Vendor providing? Lab Reports, Photo's, Cut Grade Analyses, Light Performance results are all the types of reports you should be looking for. Treat this purchase with the same care and consideration you do for a house and car. Get as much information as possible.
Check the vendor's feedback carefully and compare to the merchandise that was purchased. What does the feedback say?
Same goes for rings and settings. Get it appraised to corroborate that it is as described.
There are very reputable diamond vendors on Ebay selling quality merchandise but you need to do your homework to find them and make sure you do not get taken advantage of.
Consumers Fear ID Theft for Online Shopping.
According to a report issued by Consumer Reports WebWatch, a
quarter of Internet users have stopped making online purchases for fear of identity theft.
The report, issued last week, finds that 80 percent of Internet users are at least somewhat concerned that someone might steal their identity from the personal information available on the Web. Most Internet users, 86 percent, have made at least one change in their behavior because of fears of identity theft.
Of those who shop online, 29 percent say they have cut back on how often they buy products on the Internet. Thirty percent of users reveal that they have reduced their overall use of the Internet due to these fears, and 53 percent say they have stopped giving out personal information online, according to the report. More than half (54 percent) of those who shop online say they have become more likely to read a site's privacy policy or user agreement before making a purchase.
We advise consumers to check the Affiliations of the e-commerce site for their Privacy Guarantees. A license and seal of approval by an organization such as Trust-e is a postive indication that the website is protecting the privacy and confidentiality of your submitted information.
Same goes for the website's shopping cart: Make sure that it is SSL encrypted and that it has a Seal of Approval from a known and reliable
Credit Card processing Company such as Verisign.
Diamond Online Holiday Sales: It's Crystal Ball Time.
Doug Schwegman, Market Research Director for Cybersource, a leading Credit Card Processor for Online Merchants is the first e-commerce analyst to open his crystal ball and prognosticate on whither Holiday on-line sales are going.
Last year the U.S. Dept. of Commerce reported that online sales by U.S. retailers grew 23.9% in the fourth quarter. So what is the growth outlook for 2005 holiday sales? As of mid October, only a few forecasts of online retail sales for the upcoming holiday season have been published (see table below). Those estimates range from 22% to 26%.
So far in 2005, online retail sales have turned in a solid performance according to U.S. Dept. of Commerce data. Year-over-year Q1 growth was 23.3% and that accelerated to 26% in Q2. Third quarter data will not be available until November 22nd but merchant performance indicates that third quarter growth will be similar to that of the second quarter. In Q3 merchants processing over one year achieved a 42% year-on-year growth in credit card transactions, exceeding the 38% growth they reported the quarter before. So it appears, according to Schwegman that we are entering the holiday selling period with good online sales momentum. Further, higher gasoline prices may actually provide additonal incentive for shoppers to use online vs. in-store channels.
Coming down the homestretch in these last two months of the year, trying to estimate the peak shopping day is harder this year than in past years. This is because the biggest shopping day has historically been the Monday that falls at least seven days prior to Dec. 25th. By that formula, in 2005, the peak shopping day will be Dec. 12th. But there's a complication this year. Monday the 19th is almost seven days prior to Christmas day, so it may be possible that the 19th will be the peak day if enough online merchants and shipping providers decide to guarantee December 24th delivery for orders placed on the 19th. In any event, it seems reasonable to expect that the peak online selling period this year will be Dec. 12th - 19th.
Over the past two years the average on-line merchant has seen order levels about 40% higher in the peak selling period compared to the first week of October. Diamond and jewelry merchants see much higher seasonality. The upsurge in orders typically starts the week following Thanksgiving, but 2004 saw an earlier uptick starting in mid-October as some merchants started holiday promotions earlier than normal.
Stay tuned.
Diamond E-tailer BlueNile on Pace for Record Sales.
Internet diamond retailer Blue Nile Inc.'s third quarter of fiscal 2005 results were reported after the markets closed on November 8. Net sales were $42 million, a drop of $2 million from its second quarter, but 24 percent higher than one year earlier. Its third quarter net sales were also lower than its first quarter sales of $44 million.
Net income for the third quarter rose 49 percent to $2.5 million. Net cash provided by operating activities for the quarter ending October 2, 2005, stood at $6.6 million, compared with $3.3 million in the third quarter of 2004.
Gross profits were $9.2 million or 22 percent of net sales, both figures were less than Blue Nile reported during its second quarter of 2005.
Blue Nile excercised a share buy-back of 199,975 shares for about $6.5 million.
"Our third quarter financial performance reflects the strength of the Blue Nile consumer proposition," said Mark Vadon, CEO. "Our results demonstrate the appeal of the Blue Nile brand, the strength and potential of our business model, and our ability to execute with excellence for our customers."
Vadon said he was looking forward to "the upcoming holiday season in which we expect to achieve record sales levels, while continuing to provide our customers with an exceptional experience."
Blue Nile predicts full year sales, ending January 1, 2006, to hit between $205-$212 million, which would require fourth quarter sales of more than $75 million.
Update on E-Commerce Holiday Shopping.
E-commerce will represent the fastest-growing retail sector this holiday season, according to a new Retail Forward study.
The global management consulting and market research firm projects e-commerce sales will grow 27 percent in the fourth quarter, with holiday sales totaling $27.3 billion, according to Retail Forward's monthly ShopperScape consumer survey. Factors driving the sales growth include a robust job market, income gains and lower prices in key online categories like electronics and apparel.
But despite improvements in the online shopping experience in recent years, Retail Forward reports that two-thirds of online shoppers say they've had frustrating online shopping experiences in the past six months. According to Retail Forward's recent E-Retailing Shopper Update, the most frustrating online shopping experiences involve pop-up ads or forms, slow-loading pages and being forced to register in order to make a purchase.
The survey finds that only 11 percent of shoppers complain to the company when frustrated with a site, although they will complain to friends, family members or co-workers.
Diamond.com Reports 46% Loss for 3Q.
Online retailer Odimo Incorporated reported a decline in net sales for the three month period ending September 30, 2005, to $9.1 million compared with $10 million in 2004. Odimo’s net loss for the period increased to $3.5 million compared to $2.4 million in the third quarter of 2004. Headquartered in Florida, Odimo operates three websites -- diamond.com, asford.com and worldofwatches.com.
Odimo’s diamond sales for the third quarter decreased marginally to 33.7 percent of gross sales, as compared with 34.2 percent of gross sales in the previous corresponding quarter. Jewelry sales in the three month period increased to 15.9 percent of gross sales, compared with 12.9 percent of gross sales in 2004. Luxury goods sales decreased to 11.6 percent of gross sales, compared with 14.4 percent of gross sales, watch sales marginally increased to 38.8 percent of gross sales.
For the nine month period ending on September 30, net sales increased 8.5 percent to $33.4 million. Net loss in the nine month period decreased to $9.5 million, compared with 10.6 million in the first nine months of 2004.
Gross profit for the third quarter of fiscal 2005 was down to $2 million, (22.3 percent of net sales) compared with $2.8 million, (28.0 percent of net sales) in the previous corresponding quarter.
Odimo attributed the decline in gross profit margin to an increase in promotional activity aimed at increasing luxury good purchases.
Abazias.com Reports 3Q Loss of -15%.
Florida-based website Abazias.com reported a decrease of 15 percent in third quarter sales to $520,000, compared with the previous corresponding period, according to a company statement.
For the nine month period ending September 30, 2005, sales increased 8.5 percent to $133,000 with a gross profit of 172 percent over the corresponding period in 2004. Net loss for the nine month period reached $0.39 million compared to a net loss of $1.02 million in the corresponding period in 2004.
Zales Jewelers Reports 1Q06 Loss Of 24M.
Investment firm Goldman Sachs called Zale's "turnaround expectations for this holiday shopping season as overly ambitious," on November 9. The investors report was followed by a 2 percent decline in Zale share price that day on the New York Stock Exchange to near its 52-week low of $25.50. Shares closed 0.2 percent lower at $27.11 on the eve (November 15) of its announced first quarter of fiscal 2006 earnings.
Before the markets opened on November 16, Zale reported a net loss of $23.7 million for its first quarter of fiscal 2006. The loss includes a $5.3 million after-tax impairment charge related to its planned closing of 30 Bailey Banks & Biddle locations. Zale president and CEO, Mary Forte, said the company had "made a number of significant changes at the Zales brand in a fairly condensed period, but we believe these changes are essential to successfully reposition Zales for long-term market share growth."
Additionally, Zale repurchased $45 million in stock, which "signifies the confidence we have in our business," Forte said.
Forte said customer response to new merchandising assortments would drive market share during the Christmas holiday shopping season. During a conference call, Forte said they were upgrading some 600 best selling items and identifying some 1,200 new items and new collections "to reinforce Zale as a leader in style," Forte said.
Zale is targeting direct mail and television advertising campaigns as the primary vehicle to drive brand recognition for the holiday season.
In preparation for the second quarter, Forte said that Zale has "graduated 1,000 employees in diamond certification training" from the Diamond Council of America. "We are confident in our preparations and will take our fair share of the market this holiday," Forte said.
Zale operates 2,373 specialty jewelry retail stores in the United States, and has seen its share price fall about 10 percent in 2005. Goldman Sachs contends "in our view" that Zale took on too many changes at once and downgraded Zale stock to "under perform" from "in-line" with estimates. Zale changed merchandising about one-third of its product set, shifted product sourcing outside of the United States, and narrowed some of its stores down into special demographic fits.
In response to Goldman Sachs' questions on future brand promotion strategy, Forte said, "We did homework on this, [we] changed our ad agency and proceeded to take [lessons learned], and get more research on our own, and did more research with Diamond Council of America when we came up with our game plan for the message we will send to our consumer."
For its first quarter of fiscal 2006, Zale same-store sales slipped 1.2 percent, and Forte said, "We are disappointed with these sales results." Overall revenues for the quarter rose almost 1 percent to $432 million.
"Delay in receipts of new merchandise related to the Zales repositioning resulted in lower than planned in-stock positions during the quarter," Forte said.
Product offering changes and new vendor relationships "has temporarily extended the lead time of supplying merchandise to our stores," she said.
In October, Zale and The Knot Inc., agreed to promote Zale's brands on the wedding planner website (The Knot) as part of a full-service bride and groom service. Eventually the agreement is set to promote Zale brands with banner ads, product placement, and a ring search tool. Zale will feature The Knot's editorial features relevant to engagement ring and wedding jewelry.
For fiscal year 2005, Zale reported a 3.4 percent increase in revenue to $2.4 billion and same-store sales up 0.3 percent. Profits for the year were flat compared with a profit of $106.8 million in fiscal year 2004.
The company expects to close some 30 Bailey Banks & Biddle stores after the 2005 Christmas shopping season.
December Key Month for E-Tailers.
Luxury retail and the Internet are the hot places to shop for the upcoming Christmas holiday season, according to Tracy Mullin, CEO of the National Retail Federation.
Mullin told the USA Today newspaper that she expects an overall 5 percent growth in retail sales compared with 2004. She gave the biggest draw to luxury retail stores, online shopping, and gift certificates.
In the United States, the December gift-giving season is the most important retail season, and already diamond-related retailers and are counting on strong gains to boost their bottom line.
Mullin said jewelry stores could find December sales accounting for as much as 40 percent of annual sales.
Mullin also told the newspaper that shoppers are growing retail savvy and using catalogs, the Internet, and in-store browsing to compare prices and product quality.
According to a new survey by Yahoo! small business research, 83 percent of holiday shoppers said they would be browsing the Internet for gifts in 2005. Eighty-percent of shoppers said the high price of gasoline was causing them to drive their mouse online rather than an automobile for the shopping experience.
Sixty-percent told Yahoo! that it was important to their needs that retailers have an online presence. Shopping on the Internet also affords flexibility to the consumer to "buy anytime," avoid lines and traffic, and to find specialty items often not carried in traditional stores.
Mullin estimated only four in 10 shoppers would make purchases online.
Are You Ready For Cyber-Monday?!
Cyber Monday, which would be November 28, 2005, the Monday after Thanksgiving, is quickly becoming one of the biggest online shopping days of the year, according to a report released by Shop.org/BizRate Research 2005 eHoliday Mood Study.
In 2004, 77 percent of online retailers said that their sales increased substantially on the Monday following Thanksgiving. This trend is driving serious online discounts and promotions on Cyber Monday for 2005.
According to the survey, the largest increase in Cyber Monday sales in 2004 went to the jewelry and luxury retailers, with 89 percent of websites seeing substantial increases in sales, and consumer electronics retailers at 86 percent.
“On Cyber Monday, consumers set their sights on surfing for holiday gifts and shopping online,” said Scott Silverman, executive director of Shop.org. “This year, online retailers will be capitalizing on the increased traffic by offering special promotions and discounts,” he said.
Researchers specializing in online sales, attribute the increase in web traffic to the faster and more secure Internet connections at work. Consumers, who were unable to complete their shopping over the Thanksgiving weekend, also are driving internet sales on Cyber Monday. Internet sales analysts also expect many consumers to shop on Cyber Monday from home after work or when their children are sleeping.
According to a recent Shop.org survey, conducted by BIGresearch, more than one third of consumers (37 percent,) or 51.7 million people, said they will use Internet access at work to browse or buy gifts online this holiday season. The survey found that more than half of young adults 18-24 years (51 percent) and nearly half of those 25-34 years (49 percent) will be shopping online during work hours. The survey also found that men (42 percent) are more likely than women (32 percent) to shop at the office.
Many online retailers are offering extra incentives to encourage people to shop online. According to the eHoliday Mood Study, 43 percent of online retailers plan to offer special promotions and discounts on Cyber Monday. Deals will range from free shipping, to gifts with purchase, to percentages-off.
Online retailers are also planning for large-scale promotions on Thanksgiving Day, when most retail stores will be closed. A Shopzilla survey found that 36 percent of online retailers will be offering special promotions and sales on Thanksgiving Day. Some will even be offering their Black Friday discounts one day early on their websites.
The consumer poll has a margin of error of plus or minus 1.0 percent. Shop.org is an association for retailers online. Founded in 1996, Shop.org became a division of the National Retail Federation in January 2001. The association’s membership includes interactive executives from store-based retailers, catalog-based retailers, Web-based retailers, and retail solution providers
Internet Comes Of Age For Luxury Shoppers.
A Report today by Luxury retail analyst Unity Marketing says that luxury consumers prefer the Internet for shopping, because it is easy and convenient.
Out of 15 luxury product categories Unity listed, consumers chose 11 categories they favor for shopping online.
In the wider scheme of retail shopping however, the Internet only accounts for a fraction of the total. The figure has been growing each year since 1997, and accounted for $230 billion in 2004.
"For most retailers the luxury consumer segment represents their marketing ‘sweet spot,’" said Pam Danziger, president of Unity. "They shop more frequently and spend more money when they shop."
Danziger said that --at the very least-- half of luxury consumers planned to buy gifts online in 2005.
Fully 82 percent of luxury consumers agree with this statement: Internet shopping has made shopping easier for me. Some 78 percent agree that the Internet: Lets me find exactly what I want at the right price without a lot of hassles.
The ability to compare prices was the No.1 point valued by luxury consumers, and is also one of the most important elements across all consumer segments as well from independent studies by AOL, comScore, and Forrester Research.
Unity queried some 1,200 consumers with an average income of $142,000 and an average age of 43 years. Of the group surveyed, Unity said 94 percent used the Internet to buy products during the third quarter of 2005.
Other findings report:
* 43 percent researched a product and made the purchase in-store.
* 35 percent browsed the product in-store and bought online at a later date.
* 20 percent researched the product online and ordered it by calling the store.
* 67 percent use the Internet to compare prices.
Why Do I See the Same Diamond Listed by Many Internet Diamond Sites?
Drop ship diamonds are an unfortunate internet practice where many internet "jewelers" and diamond vendors will attach a virtual database of wholesale diamonds from various diamond wholesalers and manufacturers.
These internet diamond stores have no experience with diamonds and jewelry and in most cases have no idea about the quality of the diamonds they are selling. They literally built a website and decided to sell diamonds! They will brag about how they have a database of a gazillion diamonds to sell. The only problem is that they never actually see these diamonds, much less know anything about the crucial nuances of any given stone.
What they are doing is simply attaching a database of stones to their website with a built in markup. In most cases you will see the same diamond on many different websites, since none of these guys actually own the stone. Then an unsuspecting customer comes along and makes a purchase for a diamond which the vendor has never seen or touched, and the stone gets "drop shipped" directly from the manufacturer to the end consumer, never once passing through the hands of the diamond seller.
Buy I-Pod, Get A Diamond, Too.
Kyocera Corporation of Japan, which is largely a communications and digital imaging company, plans to add diamond jewelry to its product set by early January 2006.
The company also sells fine china. According to press reports, the marketing staff requested adding diamonds to the jewelry offerings in order to boost luxury sales.
"Growth is our mission, and creativity is our greatest asset," the company writes as its mission statement. "Create. Change. Grow. Think creatively; execute logically," which was the line of thinking used to add diamonds to the line-up of man-made opal and synthetic gemstone jewelry.
Kyocera will procure diamonds for its Diplea-brand diamond jewelry, according to the company.
Kyocera engages in the development, production, and distribution of telecommunications equipment, electronic components, solar energy systems, and industrial ceramics. Micro-gemstones and fine ceramics parts are used in many microprocessing products the company produces and sells.
Just another company looking to make a quick buck, in our opinion. See our recent entry on this topic: Virtual Diamond Databases
On-Line Sales Surge This Holiday Season.
National Jeweler reports that Online sales for the 2005 holiday season surged 25 percent, reaching $18.11 billion, according to new data from comScore Networks.
This year's holiday sales spike for online, non-travel spending from Nov. 1 through Dec. 25 eclipsed the $14.5 billion seen in holiday sales during the same period of 2004, according to comScore, which tracks online consumer behavior.
"We're seeing another terrific holiday season for online spending," comScore Chairman Gian Fulgoni said in a release issued Thursday. "The growth of 25 percent we're now seeing, versus a year ago, is slightly ahead of our initial forecast of 24 percent growth, reflecting the aggressive price discounting offered by online merchants late in the season and cnsumers' increased confidence in expedited shipping."
Apparel and accessories was the second most-popular product category by dollar sales for online holiday sales this year, as well as being the second-fastest growing product category. According to comScore's report, the apparel and accessories category saw $3 billion in online sales this year, marking a 37 percent increase over last year.
The other two most popular product categories for online holiday sales were computer hardware and consumer electronics. The sports and fitness category saw the greatest sales growth this season over last year, according to comScore, rising 49 percent over 2004.
According to comScore, the five retail Web sites which saw the greatest number of total visits during the holiday season (Nov. 1-Dec. 25) were, in descending order: eBay, Amazon, Wal-Mart, Apple Computer, Inc. and Target. As with last year, the weeks of Dec. 11 and Dec. 18 saw the greatest dollar amount of holiday online retail sales, with more than $3 million spent during each of those weeks.
Walmart Has Shaky Holiday Season
The Associated Press reports this morning that Wal-Mart Stores Inc., which made a big push this holiday season to woo customers with aggressive discounts and marketing, estimated that its December sales will meet only the low end of its forecast.
The world's largest retailer said Saturday that sales at stores open for at least a year, known as same-store sales, are expected to be up 2.2 percent in December. The forecast was for a 2 percent to 4 percent gain. Same-store sales are considered the best indicator of a retailers' health.
The company said that general merchandise sales outpaced demand for food.
Wal-Mart, which stumbled during the holiday 2004 shopping season, came out with a holiday campaign two weeks earlier than last year. The retailer had a solid start to the season, but like many merchants, struggled with shoppers delaying their purchases longer than last year.
Wal-Mart, whose gift card sales beat expectations this season, is counting on a big sales boost in January from gift card redemptions. Gift card sales are recorded only when customers redeem them.
To entice customers with the newfound money to splurge on regular-priced goods, Wal-Mart rushed in new spring assortments and new outerwear for the day after Christmas. Meanwhile, it pushed discounted holiday goods to the back corner.
Wal-Mart and many other major retailers are expected to announce their final December results this Thursday.
BlueNile Execs Selling Their Stock.
Bluenile insiders have been selling their shares all the while promoting their company. The selling pattern has been constant and consistent, with Mark Vadon, BlueNile's CEO leading the way.
This selling activity is in stark contrast to a recent interview given by Vadon:
What do Bluenile insiders know that their general stockholders don't know?
Romance is Thriving this Valentine's Day!
Harris Interactive has released a study which shows that romance is alive and thriving but is taking on different forms.
Traditions such as proposing on bended knee and the man choosing the engagement ring alone are much less popular than anticipated. However, the study also showed that traditional proposal customs were much more important to younger adults, suggesting we're entering a new era of romance.
Key findings include:
-- To knee or not to knee? Only 36 percent of adults believe it is
important that a man get down on one knee when he proposes.
Surprisingly, more men than women believe this is an important
tradition (40 percent men vs. 32 percent women). Out West it's even
less important, as 71 percent plan to keep both feet firmly on the
ground. However, young adults, aged 18-34, are much more inclined to
feel it's important to propose on bended knee, 59 percent, compared to
an average of 25 percent for older age groups.
-- Let's get personal ... Americans would choose to propose at a spot that
has personal significance to the couple (83 percent), over a nice
restaurant (12 percent), a public sporting event (1 percent), or even a
romantic destination, such as the Eiffel Tower (4 percent). Even more
important? -- Leave family and friends at home, say 91 percent of
respondents.
-- Size matters -- Especially if you live in the Northeast. While only 41
percent of adults admit that the size of the diamond is important, it's
a bigger deal in the Northeast, where 49 percent indicate size matters,
compared to 39 percent of those living in other regions of the country.
It also matters more to men (44 percent men vs. 39 percent women),
suggesting just how much they fret over the proposal and the engagement
ring purchase.
-- Two's company ... Sixty percent of adults believe both members of the
couple should be involved in choosing an engagement ring. Perhaps men
want women involved in the process out of fear of choosing the wrong
ring (62 percent men vs. 58 percent women).
-- Should I ask for their blessing? The majority, 53 percent, say it's
important to ask your future in-laws for their blessing. It's
especially true in the South, where 58 percent say it's important,
compared to 50 percent of those living in other regions. Again, young
adults (61 percent), and especially young men (68 percent), were most
likely to adhere to this tradition, compared to 49 percent of those in
other age groups.
-- Be honest, is it cheesy? No, a Valentine's Day proposal is romantic,
according to 63 percent of adults. Unlike other traditions where
younger adults were more likely to adhere to romantic traditions,
respondents find a Valentine's Day proposal more and more romantic as
they age.
-- Jolie or Aniston? We'll take Jolie. Adults choose Angelina Jolie
(chosen by 19 percent of men) and George Clooney (chosen by 27 percent
of women) as the celebrities they would most want to receive
Valentine's Day proposals from this February. At the bottom of the
list, Tanya Harding and Axl Rose each received one vote. A surprising
number of adults are not enamored of the rich and famous, with 32
percent saying they wouldn't want a proposal from any celebrity.
Bluenile Stock Price Sinks on Disappointing Results.
Shares of Blue Nile (NILE:Nasdaq )dropped sharply in late trading Tuesday after the online jewelry retailer posted weaker-than-expected results for the holiday quarter and issued a 2006 forecast below Wall Street's projection.
The company reported a fourth-quarter profit of $5.3 million, or 29 cents a share, up from $4.6 million, or 24 cents a share, a year earlier. Analysts polled by Thomson First Call expected earnings of 33 cents a share.
Blue Nile's sales rose to $73.2 million from $64.5 million, but were well below Wall Street's target of $80.3 million.
The company's outlook also disappointed Wall Street. For the quarter ending April 2, Blue Nile forecast earnings of 11 cents to 12 cents a share, with sales of $47 million to $49 million. The forecast include stock-option expenses of 3 cents to 4 cents a share. Analysts, meanwhile, had been expecting first-quarter earnings of 19 cents a share and sales of $54.1 million.
For all of 2006, Blue Nile sees earnings of 62 cents to 72 cents a share, including 14 cents to 16 cents in options costs. Analysts predict earnings of 99 cents a share, before options. The company forecast sales of $220 million to $245 million, below Wall Street's target of $258 million.
Blue Nile shares were down $6.91, or 19%, to $30.38 in after-hours trading.
Two weeks ago we pointed out that Bluenile Insiders have been constantly and consistently selling their stock.
So much for competing with Tiffany.
Valentine's Day Sales Rise Dramatically.
Valentine's Day gift-givers have spent an average of $105 on gifts to date, 40 percent more than they spent by this time last year, finds a new survey.
Unity Marketing's latest Gift Tracker study finds 15 percent of shoppers have already made their Valentine's Day purchases, and about 54 percent of shoppers still plan to make a Valentine's Day purchase.
Last year, about 60 percent of consumers bought Valentine's Day gifts, making it the third most-popular gifting holiday after Christmas and Mother's Day. About 30 percent of shoppers will purchase Valentine's Day decorations this year, according to the Gift Tracker study.
The study finds that consumers spent an average of $1,935 on gifts in 2005, with 61 percent going to holiday gifts and 39 percent going toward occasion gifts (birthdays, graduation, etc.) However, they spent about 6 percent less in 2005 on gifts than in 2004.
Zales Is In Trouble.
Zale Corporation reported earnings shy of $88 million for its second quarter of fiscal 2006. Profits for the quarter were down 12 percent.
Interim company CEO Betsy Burton said, "There had been a number of quarterly earnings misses, a number of internal financial targets missed, and our largest brand, Zales, saw its market share continue to erode."
Burton also announced that the board asked Paul Leonard, 51, to leave his post as president of Zales Jewelers, the company's largest division. John Zimmerman was appointed president of a newly-created North American division for Zale.
Zale wrote-off inventory for the quarter ending January 31, 2006, and lease settlement costs related to closing 29 Bailey Banks & Biddle locations.
Revenue for the quarter stood at $994 million, up 2.3 percent with same-store sales up 1.4 percent. Year-to-date revenue is up 1.9 percent to $1.4 billion; and same-store sales are up 0.6 percent, but the company excluded the stores it closed.
"Upon review of Zales' business, we concluded that the new strategy negatively impacted our brand positioning because it de-emphasized the value component and key diamond categories of the brand's assortment," Burton said.
Same-store sales for the third quarter are expected to remain flat the company reports.
The E-commerce landscape is rapidly changing.
How Search Engines Find Your Site
I just found a really awesome article by Lara Ewen on how search engines crawl cyberspace looking for websites.
This is a must read for anyone that wants a good basic idea of the dynamics of Search Engine Marketing and Search Engine Optimization.
If you own or operate a diamond or jewelry website, read the rest of this article!
Continue reading "How Search Engines Find Your Site" »
Perfect Diamond Gift for Her: Listen Up Guys!
Are you still contemplating what to buy her, insisting on that one perfect gift? Engagement ring? If so, you might want to head over to eBay, which is offering some exceptional items, including a $10.95 million 81.98 carat D / IF emerald cut loose diamond.
Maybe not for everybody's pocket, but if you are looking for a truly exceptional item, and have the financial ability, some of the following stones offered on eBay will leave the recipients speechless.
If you are looking for something slightly more modest, how about a 50.98 carat, I / VS1, IGI certified, pear shaped loose diamond, offered for $3.32 million?
Three other seven-digit diamond offers include a parcel of 22 GIA certified flawless diamonds with a total carat weight of 65.31 carats, on offer for $1,752,600; a 40 carat VS2 / D round sparkler offered for $1.608 million; and a 6.67 carat, VVS1 modified pear brilliant, HPHT treated fancy purplish pink diamond for $1.2 million.
All of these are yours for the taking - if you are on the seller's pre-approved bidder/buyer list.
Just another day at the office.
Winter Olympics Slows Jewelry Buying on the Net.
Interest in the 2006 Winter Olympics drove significant activity, according to comScore Network’s monthly analysis of consumer activity at top online sites.
In February, jewelry, luxury goods and accessories ranked fifth, increasing eight percent to 14.6 million visitors compared with the previous month. Tiffany & Co. helped propel the category in February with 52 percent growth to 1.3 million visitors. However, compared with February 2004, the category saw a four percent drop off.
“Although Valentine’s Day drove up traffic in several categories versus the previous month, those categories actually experienced declines when compared to February of the prior year,” said Peter Daboll, president and CEO of comScore Media Metrix. “Conversely, heavy interest in the 2006 Winter Olympics propelled the Sports category to a 16 percent traffic gain and 32 percent increase in engagement over February 2005. It appears that the Olympics took away mindshare from Valentine’s Day during the middle part of the month, possibly resulting in softer sales for Valentine’s Day retailers.”
OK Gals, you're safe for another four years.
Blue Nile.Com Sales Up, Stock Down
Blue Nile's stock price sank in Februray, despite reports of record fourth quarter an full year sales.
The online diamond retailers net sales increased 20 percent to $203.2 million for the year ended Jan 1.
However, shares of BlueNile were recently trading at $30.85 down $6.44 or 17.4 percent on volume of about 2.1 million shares.
Additionally, if you research Blue Nile on the Internet you will see that the big honchos have been selling off their stock like crazy.
So what's up??
Tiffany To Open Two New Diamond & Jewelry Stores In China.
Luxury retailer Tiffany & Co., plans to open two new stores in China during 2006. One store will open at Beijing's Oriental Plaza, and a second store at Shanghai's Plaza 66. Beijing is scheduled to open in May, and Shanghai could open towards the end of the year, the company reports.
"The Oriental Plaza in Beijing and Plaza 66 in Shanghai are ideal environments for a Tiffany store," said Darren Chen, group vice president at Tiffany & Co. "These convenient locations expand our presence both in Beijing and Shanghai, cities of growing importance as global business centers and as destinations for both domestic and overseas tourists."
Once the new stores open, Tiffany will have a total of two stores in each of those prominent cities. Tiffany currently has a boutique in Beijing's Peninsula Palace Hotel, which opened in 2001, and a boutique in the City Plaza shopping complex in Shanghai, which opened in 2004.
How do say "Bling-Bling" in Chinese?
"Bring-Bring"!
Diamond Identification Method for Consumers: Bring Napkins
The Financial Times of London reports on a novel way to identify Diamonds from fakes:
It is said that Alexander the Great found a valley full of both diamonds and poisonous snakes. No one could work out how to retrieve the jewels until Alexander had the idea of throwing down raw meat, to which the diamonds attached. When eagles flew down for the meat, Alexander's men just had to follow them to their nests.
It sounds like fantasy but diamonds are attracted to fat, and the story reminded people how to tell real diamonds from fakes. De Beers still practise Alexander's trick in their South Africa mines today: They use "grease tables" and only the valuable stones stick.
Today, most engagement rings are diamond but after the war, people wanted holidays, cars or colorful gems to celebrate a future marriage.
In 1947 a New York copywriter, given the task of finding a slogan for her client's product, stayed late in the office. "I put my head down and said: 'Please God, send me a line.'" Then she scribbled: "A Diamond is Forever" and the rest is History.
Diamonds For Dogs!
They say diamonds are a womans best friend.
Apparently they are dogs best friend as well!
Check out this link.
Buying Loose Diamonds, Engagement Rings, Wedding Bands, & Wedding Rings: Trust and Verify.
Marshall Loeb of Market Watch quotes our friend and colleague, Jay Mednikow with advice to consumers on how to safely shop for loose diamonds, engagement rings, wedding rings and bands, both in jewlery stores and through internet websites. It is advice we agree with 100% and worth following.
Few purchases are more mystifying for first-time buyers than fine jewelry. There's more information out there than ever - from jewelers' Web sites and online forums to nearly ubiquitous grading reports from independent labs. But buying expensive gems and precious metals is still largely a matter of trust between you and the jeweler.
First, educate yourself on the basics. For diamonds, that means the four Cs: cut, color, clarity and carat weight. For gold, platinum and silver, it means purity.
You can find helpful information on these fundamentals from the Federal Trade Commission ( FTC) and the Better Business Bureau (BBB). The Gemological Institute of America, the most prominent diamond grading agency, provides tutorials on buying diamonds and colored gems at (GIA Education).
"It's less of a blind purchase than it used to be," says Jay Mednikow, president of 115-year-old Mednikow Jewelers in Memphis and Atlanta. "But a jeweler who knows what he's doing can take advantage of you if he wants to."
Thus, there is still no substitute for a reliable dealer with an established reputation. Many jewelers are GIA-certified gemologists and display their credentials prominently.
For diamonds, Mednikow recommends buying only those with grading certificates from GIA, the American Gem Society or another independent laboratory. If a jeweler says he can offer you an uncertified diamond at a discount, tell him you'll pay to have it analyzed since the cost should be only $50 to $300 depending on the size of the stone. Read warranty and return policies carefully and make sure all guarantees are written on your sales receipt - it's your legal contract.
You may have a hard time distinguishing between slight variations in color and clarity, but still trust your own eyes.
Mednikow recommends holding diamonds with a pair of tweezers over your finger or against a white background and under lights of different types and varying brightness. With shapes other than round-cut, which has standard specifications, and with colored gems, you will have to rely much more on the jeweler's expertise.
If you are buying a colored stone such as a ruby, sapphire or diamond, ask if it has been "treated" to enhance the color. Some processes are routine, like heating for sapphires and rubies and oiling for emeralds, but others are temporary or undesirable.
Up to half the gold jewelry sold in the U.S. bears a false karat rating, says Mednikow. Choosing a reliable merchant is your only insurance, although national retailers like Zales and Sears are diligent about the purity of their gold.
Guess Where You Can Buy Diamonds & Jewelry? You Won't Believe It!
Idex Research today reports that Specialty jewelers who lament that they are losing sales to discounters, department stores, and many other retail categories are correct. Just-released information from the U.S. Department of Commerce reveals that for every specialty jeweler in the U.S., there are three other merchants – whose primary business is not jewelry – who are also selling diamonds, precious metals, and other goods that have traditionally been the domain of specialty jewelers.
There are just over 128,000 retailers in the U.S. who sell jewelry in their stores, according to the latest Business Census data from the U.S. Department of Commerce. Roughly 28,000 of those stores, or about 22 percent of all jewelry retail outlets, are specialty jewelers; the others represent a wide variety of retail categories including department stores, general merchandise stores, warehouse clubs, apparel retailers, non-store retailers, and a number of other specialty retailers. The graph below illustrates the mix of specialty jewelers to total retailers of jewelry in the U.S.
Stores Selling Jewelry by Category
Percent of Total of 128,000 Stores
Source: Dept. of Commerce
Because jewelry is such an attractive industry – gross margins are healthy and the long term characteristics of demand are positive – there are many merchants who are trying to sell jewelry.
Further, as a result of few barriers to entry, retailing attracts a large number of merchants who will try to sell anything to make a profit.
The bad news for specialty jewelers is that they are losing market share to those merchants whose business is not primarily selling jewelry. Over the past decade, specialty jewelers’ market share in the U.S. has dropped from about 50 percent to just over 47 percent, as the graph below illustrates.
There may be some surprises among the list of retailers who are gaining – and those who are losing – market share in the jewelry category. As expected, non-store retailers have among the strongest growth of any retail category. Stores that retail sporting goods, hobby supplies, books, and music (a single category, according to the Department of Commerce) have also posted strong jewelry sales gain, though this category generated an aggregate of just over $100 million in sales. That was just enough to be included on the Idex list, which analyzes only retail categories with $100 million or more in annual jewelry sales.
A graph of those retail categories that are gaining market share and those which are losing market share is shown below. These are all of the retail categories which report that they have $100 million or more of jewelry sales annually.
U.S. Specialty Jewelers’ Market Share
Source: Dept. of Commerce
Who Is Taking Jewelry Market Share?
Sales Growth over Past Ten Years by Retail Category
In addition to the list of logical purveyors of jewelry, there are a number of surprises on this list of jewelry outlets. For example, the Commerce Department’s Business Census, lists 117 stores which primarily sell beer and wine that also sell jewelry. You can gas up your car at 178 gasoline stations that also sell jewelry. In addition, there are about 385 convenience stores (such as 7-Eleven) which sell jewelry; 1,210 book stores sell jewelry; and, 37 pet stores also sell jewelry. In the prior Business Census (1997) about 85 automobile dealers also sold jewelry; by 2002, however, those car dealers apparently had stopped selling gemstones and watches.
Here’s an exhaustive list of all merchants who sell jewelry, but whose primary product line is not jewelry.
* Furniture & furnishings stores
* Consumer electronics stores
* Appliance stores
* Home centers, including building materials, lawn & garden supplies, nurseries, farm supply and hardware stores
* Grocery stores, supermarkets, convenience stores
* Fruit, vegetable, confectionery, and nut stores
* Beer, wine, and liquor stores
* Cosmetics, beauty supplies, and perfume stores
* Optical goods stores
* Gasoline stations
* Clothing stores, including men’s wear, women’s wear, children and family clothing, shoe stores, and infants’ stores
* Luggage and leather goods stores
* Sporting goods, hobby, and musical instrument stores
* Sewing, needlework, and piece goods shops
* Book stores, news dealers, college book shops
* Music stores
* Department stores
* Warehouse clubs
* Variety stores
* Florists
* Office supply, stationery, and gift shops
* Used merchandise stores (pawn shops are included in this category)
* Pet stores, art dealers, tobacco stores
* Electronic shopping and mail-order retailers
* Vending machine operators and direct selling, including in-home sales
Loose Marquise Diamond Shape: What to Look For.
The Marquise Brilliant takes its name from a legend that the Sun King desired a stone to be polished into the shape of the mouth of the Marquise of Pompadour.
The Marquise Brilliant is a boatshaped modified brilliant. It is generally agreed that a length-to-width ratio between 1.75:1 and 2:1 is most pleasing. As with other fancy shapes, a certain degree of what constitutes a beautiful shape has to do with the consumer's individual taste. The ultimate shape of the finished diamond is determined by the rough and what parameters it allows. The typical Marquise Brilliant contains 56 facets.
Of concern to consumers when evaluating a marquise shape diamond is the appearance of a visual pattern called a "bow-tie" which looks exactly like that, right in the center of the diamond. It is true that an extreme bow-tie can be jarring and unattractive to the eye, but some amount of bow-tie is beneficial to the visual appearance of the diamond as it provides contrast brilliance and makes the stone stand out in sharper detail.
Minimal bow-tie indicated by the arrows.
An example of a beautifully cut marquise diamond is shown below.
Zales COO Resigns.
Management shifts continue at Zale Corp. as the company announced the departure of another top executive, Sue Gove, executive vice president, chief operating officer and member of Zale's board of directors.
Gove resigned as an officer and director effective immediately, according to a Zale release issued Thursday. She follows former CEO Mary Forte and former Zales Jewelers' president Paul Leonard, both of whom left the company earlier this year.
"The company would like to thank Sue for her many contributions over the last 25 years, and we wish her well in her future endeavors," Richard Marcus, chairman of Zale's board of directors, said in the statement. "We are very appreciative of the talent, dedication and passion she brought to the business."
Zale is currently operating with an interim CEO, Betsy Burton, and has not named a successor to Forte.
Expect a continued Management shake-up at Zales who have been losing money at a rapid rate as we have chronicled here: Zales Loss . Increased competition from the Internet and the flight to diamond and jewelry quality by consumers are a few of the reasons for Zales downward spiral.
I hope the Zales Board of Directors at least gave her a Gold Watch on her way out the door.
David Yurman Jewelry: Evolution of a Jewelry Designer.
The Orlando Sentinel has an interesting feature on David Yurman today.
David Yurman jewelry is like your favorite blue jeans -- only much more expensive. The jewelry is "comfortable," says Yurman, 63, who recently visited his new boutique, which rubs shoulders with Cartier and Tiffany in Orlando's Mall at Millenia.
The jewelry is also versatile, he says. "You can wear it anywhere, day to evening." Just like blue jeans.
It wasn't always that way with jewelry. Before the 1980s, when Yurman's now-iconic cable bracelets became the most coveted, and copied, arm candy in the United States, there were two kinds of jewelry: Costume for everyday wear, and fine jewelry for special occasions.
The relaxed elegance of Yurman's designs bridged the divide. The jewelry is classic but with a modern twist that gives it go-anywhere elan.
Fashioned from gold and silver, many pieces also feature coral and turquoise, a sparkling array of gemstones and Yurman's current favorite, South Seas pearls. Signature motifs include a squared "cushion" shape, a hook-and-eye closure and the widely recognized twisting "cable" pattern.
The designs are "a combination of art, fine jewelry and fashion," says Yurman, who wears several of his creations: A ring, a bracelet and a square-faced watch.
Dressed all in black, his thick white hair swept straight back, his chin fashionably stubbled, he looks every inch the artist from Tribeca, the New York neighborhood where he and his artist wife, Sylvia, live and work.
Before designing jewelry, Yurman was a sculptor, hanging out with prominent Beat artists of the 1960s; writer Norman Mailer, painter Franz Kline, sculptor Ron Boise.
"I did these funny little silver angels," he says.
It was one of those angels, fashioned into a belt buckle, that sparked his career as a jewelry designer.
The buckle was a gift to Sybil, his girlfriend at the time. She wore it to an art opening, where it caught the eye of the gallery owner. He asked if it was for sale. Yurman said no, but Sybil said yes -- and within weeks they found themselves in the jewelry business.
Ever since, they've had good-luck angels perched on their shoulders. Their collections are in more than 450 stores around the world, and David Yurman is one of the best-known luxury brands on the planet.
Gwyneth Paltrow and Barbra Streisand wear the jewelry; Steven Spielberg and Kevin Spacey the watches; hip-hop moguls Jay-Z and Damon Dash the men's designs. Their ad campaigns have featured models Amber Valetta and Kate Moss, and the company's newest "face" is Naomi Watts -- who recently flashed Yurman earrings of rose quartz and diamonds at the Oscars.
Orlando real estate agent Virginia Morales, 49, collects Yurman bracelets. "I wear three, four at a time," she says. "My husband always knows what to give me for my birthday, anything David Yurman."
Since founding their company in 1980, the Yurmans have worked as a team.
"I have the vision; I design the collections," explains Yurman. "My wife does the styling and merchandising."
Their son, Evan, is part of their ever-expanding creative team. And let's not forget the lawyers.
The couple's designs, which range from about $300 for a simple bracelet to more than $7,000 for a multistrand couture necklace, are among the most copied in the world. Yurman is not flattered by imitators and spends $1 million a year protecting his brand.
"Copying is stealing," he says. People who wear copies are deceptive. "And that's not cool."
Worse, he says, they are supporting counterfeiters who may pay no taxes, have ties to illegal operations or use child labor.
As his company grows, Yurman finds himself more in the role of executive than artist.
"It's less like playing an instrument, more like being the leader of the band," he says. "I'm about ready to do more art work."
But that is not likely to happen anytime soon. First, he plans to introduce a line of Yurman eyewear and a Yurman fragrance, followed by Yurman handbags and luggage.
No wonder he believes in angels.
Tiffany Sales Up, Profits Down.
Tiffany & Co.’s overall net sales in fiscal 2005 rose 9 percent to $2.4 billion, and profits fell 16.3 percent to $254.7 million.
Tiffany’s attributed the decline in profit to a one time gain in December 2004. In fiscal 2004, earnings in the fourth quarter and year benefited from a pre-tax gain of $194 million as a result of the company's sale of its shares in Aber Diamond Corporation.
Retail sales in the United States rose 9 percent to $1.2 billion during the fiscal year, same-store sales rose 7 percent (branch store sales rose 7 percent and New York flagship store sales rose 5 percent.) Tiffany’s attributed comparable store sales growth to higher spending per transaction. Tiffany’s opened four stores stateside in 2005 and operated 59 Tiffany & Co. stores by year-end 2005.
Diamonds Are A Girl's Best Friend, NOT Moissanite.
Shares of jewelry maker and sole source of moissanite Charles & Colvard Ltd., fell on March 27, a day after the company forecasted lower quarterly sales due to substantially lower orders from K&G Creations.
Shares dipped $1.73, or 12.8 percent, to $11.75. The stock price is down 27 percent so far this year, adjusted for stock splits.
In a company statement on March 26, Charles & Colvard said sales for first quarter fiscal year 2006 are expected to be between $7.5 million and $8.4 million, which is 25 percent to 33 percent lower than a year ago. The company expects K&G's orders to slip due to lower orders from the 2005 merger of its customers, Federated Department Stores and May Department Stores Co.
Charles & Colvard’s board authorized the repurchase of up to one million common shares. Company shares have traded between $8.63 and $26.29 over the past year.
Loose Cushion Cut Diamond: What Is It?
The Cushion Cut is a generic name for the Old Mine Cut developed before the turn of the century; these days the name" cushion" is often used for colored stones cut in this shape.
A Cushion Cut is a square or squarish-rectangular cut with rounded corners and 58 brilliant-style facets that resemble a pillow shape, hence the name.
A hundred years ago, when Cushion Cuts were first developed, diamonds were not cleaved into two pieces of rough, as they are today; they were ground down as a single stone and the resulting polished was lumpy and thick. Cushion Cuts have very thin girdles and bigger culets than today's full-cut diamonds.
Designers are requesting Cushion Cuts with big culets, but, in general, the smaller the culet, the better the stone. Older Cushion Cuts return light in blocky patterns; newly cut ones return light in needlelike patterns.
MARKETS AND MARKETING
Cushion Cut diamonds are popular in matching pairs. They are especially being used in larger-carat earrings and also as a center stone in rings. Cushion Cuts first became popular again about ten years ago, and their popularity has increased as designers and antique dealers continue to use them.
Cushion Cuts offer a lot of weight at a moderate price. Larger Cushion Cut diamonds sell for about 30 percent less than full-cuts of the same weight, while smaller cuts sell for about the same. A 1-carat G/VS Cushion Cut stone will sell from $2,800 to $3,800. Two-carat and up stones sell in the $3,500 to $5,000 per carat range. The most popular sizes are .75 to 1.5 carats. The availability of 2-carats and up is a problem because of the high demand for larger stones, both by estate and antique dealers for replacement or repair and by manufacturers.
Look for good clarity and color. Because Cushion Cuts have very thin girdles, girdles on older ones are often chipped. Look for Cushion Cuts that are symmetrical; off-shape ones are difficult to use. Look for a medium culet that is not too heavy, unless you have a special reason to use this cut with a big culet. Pick a mounting that's appropriate for the softer reflections and refractions of a Cushion Cut. Old Mine Cuts were traditionally set in yellow gold or silver with a patina or oxidation; therefore, they look better set in matte metals rather than highly polished ones.
Odimo.com In Financial trouble
Odimo.com, one of the Internet's first diamond and jewelry websites is in deep financial trouble.
Online diamond retailer Odimo Incorporated alerted investors that the company requires additional financing to "continue its operations, meet its operational goals, and to pursue its long term strategy."
Odimo's fiscal year ended December 31, 2005, and the company released its fourth-quarter and year-end results after the markets closed on March 30. Odimo owns www.diamond.com, www.ashford.com, and www.worldofwatches.com.
In its financial statement, Odimo states: "The company is currently implementing strategies that include: (i) reducing costs, (ii) seeking equity and debt financing, and (iii) exploring the sale of the company or certain assets. There is no assurance that the company will be able to successfully implement any of these strategies. The financial statements do not include any adjustments that might result from the outcome of this uncertainty."
During the year, and as part of cost-cutting measures, Odimo and SDG Marketing agreed to terminate their agreement, to which Odimo returned $3.7 million (and $700,000) in diamond inventories to satisfy payables.
Losses for the fourth-quarter at Odimo grew to $13.9 million from $1.7 million one year earlier. Sales fell 14 percent to $18.5 million.
For the fiscal year 2005, Odimo sales were flat at $52 million, and orders decreased during the year by almost 3 percent to 151,700. The average order value however increased 3.4 percent to $387. Gross profit was 24 percent of net sales, or $12.5 million, down from $15.1 million in 2004.
Loss from operations was $23.4 million, up from $12.5 million in 2004, inclusive of a $9.8 million non-cash charge to record the impairment of goodwill.
Engagement Ring Purchase onThe Internet: Is This A Good Deal?
Is the question being asked by a consumer this morning on Diamondtalk.com. He has seen a Princess Cut that is being listed on EIGHT different internet diamond websites at different prices!!
Discussion is here: Good Deal?
Here are the multiple listings for this one diamond:
Who really has this diamond?
2.23 I VS1 71.7% 72% GIA med-stk no gd vg no 7.42x7.27x5.21 $6209 $13847*SP
2.23 I VS1 71.7% 72% GIA med-stk no gd vg no 7.42x7.27x5.21 $6262 $13964SP
2.23 I VS1 71.7% 72% GIA med-stk no gd vg no 7.42-7.27-5.21 $6276 $13996*
2.23 I VS1 71.7% 72% GIA med-stk no gd vg no 7.42x7.27x5.21 $6291 $14029
2.23 I VS1 71.7% 72% GIA med-stk no gd vg no 7.42x7.27x5.21 $6306 $14062*S
2.23 I VS1 71.7% 72% GIA med-stk no gd vg no 7.42x7.27x5.21 $6308 $14066*SP
2.23 I VS1 71.7% 72% GIA med-stk no gd vg no 7.42*7.27*5.21 $6339 $14136*S
2.23 I VS1 71.7% 72% GIA med-sl thk no gd vg no 7.42x7.27x5.21 $7198 $16051
This diamond is supplied by the manufacturer to many internet websites and is known as a "Virtual Diamond".
Little if any information is provided save for a few numbers off the lab grading report and the price. You are buying blind.
We have blogged on this topic several times. Same Diamond Listed All Over The Internet?
Virtual Diamond (VD) databases do not give you the necessary information you need, e.g.; photo's, Imagescopes, and light performance data such as provided by the Gemex Brilliancescope. As such, these lists are useless. Would you buy a Home this way? I doubt it. Why should your diamond purchase be any different. It's also big money.
This is a big purchase not only because of the money, but even more so because of the emotion and psychology behind it. You need to get this right the first time. Work with Internet websites that give you comprehensive information.
Hearts On Fire To Replace The Dog with Diamonds, As Man's Best Friend.
Don't tell the family dog, but Hearts on Fire is making a bid to replace a man's favorite canine companion with diamonds.
The company announced that it is challenging the notion that custom diamonds are only gals' best friend by introducing a loose diamond program aimed specifically at men. The new platinum collection, "Distinguished," offers rings, bracelets and cuff links as semi-mounts for diamonds of male customers' own choosing.
"Men are wearing more and more diamond jewelry, and are demanding more of a selection, much like women have," designer Katherine Rosenberg-Pineau, Hearts on Fire vice president of product development and merchandising, said in a release. "Why shouldn't men be able to select the diamond of their choice, too? The 'Distinguished' collection offers this."
In platinum, the collection retails from $5,900-$20,000. Hearts on Fire touted Olympic Gold medalist Apolo Anton Ohno in its release, who wears the brand's "DreamStone Talisman" around his neck. It retails for $16,000.