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David Brown

By the Numbers: Month on Month Comparison Numbers Continue to Show Strong Progress

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[dropcap cap=E]conomic uncertainty continues to make headlines but jewelry consumers are showing a new eagerness to spend, the Edge Retail Academy’s monthly data shows for September. [/dropcap]

This month we compare September results for 2011 against the equivalent month for September 2010 and the figures look encouraging:

Monthly figures for September 2011 across our sample range of stores show average store sales of $90,524, up from $74,931 in September 2010. The increase represents almost 21 percent growth on the same month last year and is one of the strongest performances we’ve seen so far. Repairs were also healthy with average store monthly repair business increasing from $15,341 to $12,408 – an improvement of 23.6 percent. This is surprising given that repairs normally perform better when sales are slower.

Of particular note is the increase in the value of the average item sold and a concurrent drop in the quantity of items sold. The slowdown in bead sales, which we have touched on previously, is highlighted here, with its impact on both quantity and overall average sales. Diamonds have experienced something of resurgence and will have contributed to the average retail sale increase.

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What’s especially encouraging in these numbers is the increase in profitability that the average store is getting from each $1 of sales. September last year showed an average margin of 49 percent, or $0.49 for each dollar of sales. September 2011 shows the figure for the month increasing to $0.52 per $1 sold. Isolated snapshots can be misleading, but as the graph below shows, the trend has been consistently improving over the last 12 months.

Again this is a little surprising, as the margin achieved on most bead products has been historically better than the average margin achieved in most stores. With the slowdown in bead sales and an increase in diamond business we would have expected to see margins shrinking. What may have helped has been a willingness for many jewelers to price in the rising cost of gold, meaning that older inventory purchased at lower historic gold prices is yielding better margins when recent sales are made at current price levels.

It may also indicate a more confident retail sector, which thanks to increased demand, is feeling a lot better at asking the customer to pay what items are worth.

[componentheading]About the Author [/componentheading]

David Brown is President of the Edge Retail Academy, an organization devoted to the ongoing measurement and growth of jewelry store performance and profitability. For further information about the Academy’s management mentoring and industry benchmarking reports contact Carol Druan at [email protected] orpPhone toll free (877) 5698657
Edge Retail Academy, 1983 Oliver Springs Street Henderson NV 89052-8502, USA

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