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Market Intelligence - The Business Of Jewelry Stores

 

Market Intelligence – The business of jewelry stores

Key themes:

1. The Great Recession broke many jewelry stores – basically, small businesses

2. The jewelry retailing landscape has been massively transformed

“The downsizing and clearing out has now bottomed out”

Jewelry Retailing Landscape

 

Exhibit 10-1: Number of jewelry store establishments 2002-2014E

Number of Jewelry Store Establishments.png

Source: US Census Bureau, Equity Communications Estimates

The number of jewelry stores is down 18.2 percent from 2002, largely because of the Great Recession.

 

Exhibit 10-2: Changed retail landscape for jewelry stores (2002-2012)

Jewelry Store Landscape.png

Source: Equity Communications, Analysis of US Census Bureau Data

 

Exhibit 10-3: Retail stores lost or gained per state (2002-2012)

USA Jewelry Stores per State

Source: Equity Communications, Analysis of US Census Bureau Data

 

Exhibit 10-4: Percent change in number of jewelry stores per state 2002-2012

Percent change in number of jewelry stores per state

Percent change in number of jewelry stores per state

Exhibit 10-5: Fewer specialty jewelry stores service the population

number of americans per specialty store.png

Source: Equity Communications, Analysis of U.S Census Bureau data

Jewelry stores that survived the clear are set to increase sales since there are now fewer specialty players.

Similarly, space has opened up for retailers like clothing stores to grab additional market share.

“The Northeast is the strongest region for jewelry stores”

Exhibit 10-6: States with the best and worst population-to-store ratio (2014)

Exhibit 10-6: States with the best and worst population-to-store ratio

Source: Equity Communications, Analysis of US Census Bureau Data

Exhibit 10-7: Jewelry store sales 2002 -2014E

US Jewelry Store Sales.png

Source: Equity Communications, Analysis of US Census Bureau Data

We forecast lukewarm to good end of year sales for jewelry retailers. Jewelry store sales for 2014 are likely to increase at least 4.6 percent to $31.742 billion.

Please note: Data retrieved from

http://thedataweb.rm.census.gov/TheDataWeb_HotReport2/econsnapshot/2012/snapshot.hrml?NAICS=448310

These estimates are subject to revision from time to time. Last updated in November 2014, a few weeks back. Our figures differ slightly from those provided by the U.S Census Bureau because we exclude Puerto Rico in our database

Exhibit 10-8: State market share of jewelry store sales 2012-2014

Market Share of Jewelry Store Sales.png

Source: Equity Communications

The top five states have 44.8 percent market share of jewelry store sales, a slight increase from 44.1 percent in 2007. The top ten states have 60.3 percent market share of jewelry store sales, a slight increase from 59.7 percent in 2007.

California leads the nation with 12.7 percent market share of jewelry store sales, followed by New York with 10.5 percent, Texas with 9.3 percent and Florida with 8.4 percent. Of course, these are also the top four most populous states.

However, there are states like New Jersey, which punch above their weight in terms of sales.

“The $1.367 million national average for jewelry store sales is misleading”

Exhibit 10-9: National average annual sales per jewelry store establishment 2002-2014

Source: Equity Communications

Average Sales Per Jewelry Store.png

Average annual sales for jewelry stores have increased 67.8 percent from $0.815 million in 2002 to $1.367 million in 2014.

Two factors are at play here. First, the average profile of a consumer buying jewelry at specialty stores has shifted to the higher income categories. High-income consumers spend more on jewelry than low-income categories.

Second, there are now fewer jewelry stores to service the USA market.

However, the national average is misleading

Exhibit 10-10: Regional variances in average annual jewelry store sales

Regional variances in jewelry store sales.png

Source: Equity Communications

Just eleven states have annual store revenues above the $1.36 million national average. The two heavyweight markets of California and Texas skew the national average to the high end. Otherwise, half of the states have sales above $1.17 million and the other have sales below the median.

Nevada is the outlier, benefiting from its reputation as the marriage capital of the world. Visitors from out of state have pushed average store revenues to $2.39 million, an increase of 111.9 percent from 2002.

Broadly considered, jewelry stores in Texas have experienced rapid sales growth. Average store revenues are up 98.5 percent from $0.848 million in 2002 to $1.68 million in 2014.

New Mexico is the only state to have experience negative store sales growth, down 1.4 percent from 2002.

Indiana, Alaska and Massachusetts have lagged other regions in store sales growth, up less than 20 percent since 2002.

Exhibit 10-11: Jewelry store sales per capita (2002-2014)

US Jewelry Store Sales Per Capita.png

Source: Equity Communications

Exhibit 10-12: Regional variances in per capita jewelry store sales

State per capita jewelry store sales.png

Exhibit 10-13: US jewelry stores – Key industry statistics

US Jewelry Stores: Key Industry Statistics

US jewelry stores – Key industry statistics

Exhibit 10-14: Jewelry store revenue from actual sales of jewelry

Jewelry Store Revenue From Jewelry.png

Source: Equity Communications, Analysis of Census Bureau Data

95.4 percent of jewelry store revenues come from the actual retailing of jewelry and watches. Consumers increasingly look to accessories as the most important part of their wardrobe. Moreover, the number of fashionable women with money to spend is increasing. For these reasons, the fashion jewelry and watches categories will continue to take away market share from other less popular categories.

Exhibit 10-15: USA personal consumption expenditure on jewelry (2006-2013)

Personal Consumption Expenditure on Jewelry.png

Source: Bureau of Economic Analysis, last revised August 2014

Exhibit 10-16: USA personal consumption expenditure on jewelry – 2013 State Estimates

Personal Consumption Expenditure States.png

Source: Equity Communications

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