Jewelry: discounters gain 11.8%; catalogers take half of $5.1B sales - Annual Industry Report, part 2

Discount Store News, July 18, 1988

Jewelry: Discounters Gain 11.8%; Catalogers Take Half of $5.1B Sales

Spurred by novelty items, varied finishes, strong basics and weak apparel direction, jewelry sales managed an 8.5 percent increase to $5.1 billion at discounters nationwide in 1987 compared to the $4.7 billion in the previous year, according to DSN research.

The biggest sales gain came from specialty discounters, where sales climbed 16.7 percent to $700 million, while full-line discounters managed an 11.8 percent gain to sales of $1.9 billion during 1987. However, still pulling in the bulk of jewelry sales were catalog showrooms, where sales during the year increased 4.2 percent to $2.5 billion.

At full-line discounters alone, jewelry sales per store rose to $231,900 in 1987 from $209,500 in 1986, but department size remained the same at 650 square feet, producing sales per square foot in 1987 of $356.77 compared to $322.30 in the previous year.

Initial markup also increased at full-line discounters, moving from 49.2 percent to 52.4 percent, while gross margins increased from 40.5 percent to 42.5 percent and turns stayed constant at 2.1.

Problematic Apparel Depts.

For many discounters, these generally improved results were buoyed by the problematic apparel departments. Although jewelry purchases often accompany apparel sales, the lack of excitement in the latter category actually led many customers to update their wardrobes with jewelry.

Newness came to jewelry in several forms, including hoops, dangled and drop earrings, and button and flower touches, along with the hoop.

Varied textures also created interest for discount shoppers, as jewelry companies experimented with matte gold finishes and wood in faded color tones. Colors ranged from bold brights to soft pastels for spring and then moved to clear metallic tones for summer.

At the same time, discounters did well with more conservative offerings in classic styles and spectator colors. Additional interest was generated by a turn toward romantic styles and antique-inspired jewelry.

While discounters' basic costume jewelry line ranged from $3 to $5, several also carried a bridge price point as well. The trend toward more fine jewelry also continued at many discounters, as more realized an improved perceived customer image.

Superstore Fred Meyer rated such success with its fine jewelry that the Portland, Ore.-based chain opened freestanding Fred Meyer Jeweler stores in late 1987. Located in large regional malls, the stores allow Fred Meyer to reach many new customers and also add credibility to the fine jewelry departments chainwide.

Other retailers found additional business by introducing or stepping up their children's costume jewelry selection.

Norwalk, Conn.-based Caldor rolled out a kids' costume jewelry program to all stores that features a tower stand in the jewelry area, just adjacent to kids' apparel.

Jamesway also realized positive results with children's jewelry, which now accounts for 25 percent to 28 percent of the chain's total jewelry business while only accounting for about 15 percent to 20 percent of the assortment.

Going forward, newness will come with rich brights as jewelry takes on a fall approach. While it has been able to survive in the midst of poor apparel sales, jewelry could realize better sales growth if apparel improves.

Table : Jewelry: $5.1 Billion