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Valentine’s Day Sales Shifting from Retail to Restaurants

Valentine’s Day is upon us and industry research firm IBISWorld has tiffany its annual holiday sales forecasts.

This year, IBISWorld said that it expects total Valentine’s Day spending to be up 3.3 percent from 2009, reaching $17.6 billion. Because Valentine’s Day falls on a Sunday, the research firm anticipates consumers to move from traditional gift-giving towards dining out.

As described by the Company, additional findings are:

“Because Valentine’s Day lands on a Sunday, restaurants are likely to gain traffic throughout the entire weekend,” said Toon van Beeck, senior analyst with IBISWorld. “Furthermore, because President’s Day is on the following Monday, many consumers will be able to travel over the three-day weekend, further bangles restaurant sales.”

With consumers dining out and traveling, Valentine’s Day will not be as joyous for retailers. Men typically buy candies, flowers and jewelry during the work week, but since the holiday falls on a Sunday they will not feel as much pressure to purchase by Valentine’s Day. As a result, they are not as likely to take the time on the weekend to shop, opting instead for a romantic dinner out.

“Many retailers will see Valentine’s Day as an opportunity to kick start the new year, but the unemployment rate and continued uncertainty of the economic recovery will hamper growth and expansion,” explained van Beeck. “This combined with the fact that the holiday is a discretionary purchase, IBISWorld expects customers to remain on the shopping sidelines for the second consecutive year.”

One industry in particular that relies heavily on Valentine’s Day is florists, and businesses must work extra hard this year to achieve their desired sales. Research from the Society of American Florists shows that Sunday is the worst day for florists come Valentine’s Day, therefore making this year’s sales especially bleak. IBISWorld expects rings to counter this by pushing early promotions in an attempt to increase orders and building sales throughout the week leading up to the weekend holiday, opposed to just a day or two beforehand.

IBISWorld is an independent source of industry and market research, offering a database of information and analysis on every U.S. industry.

Zale Swings to Profit, Sales Remain Weak

Zale Corp. swung to a stronger-than-expected profit in its fiscal second quarter, snapping six straight quarters of tiffany pendant, although the struggling jewelry retailer’s sales remained weak.

On Tuesday, shares in Zale rose on a report that U.S. private equity firm Apollo Management LP might take a stake in the company, with plans to insert its own management team. Earlier this year, the company forced out its chief executive and two other top executives after rival Signet Jewelers Ltd.’s holiday results outshone Zale’s, although Signet has been outperforming Zale throughout the recession.

The company didn’t mention Apollo in its earnings release, but Chief Financial Officer Matt Appel said the company’s primary focus is to strengthen liquidity in the next 90 days “by attracting new capital.”

As for the business itself, interim Chief Executive Theo Killion said the company’s “direct competitors have demonstrated that the market for mid-tier jewelers has stabilized.” While the company’s gross margin, inventory levels and earnings have improved, it must focus on retail fundamentals and the core diamond business to improve sales, he added.

Job losses and tight credit have caused even high-income shoppers to forgo discretionary purchases liketiffany earring, forcing a swath of sellers to close shop. For its part, Zale has long been reducing its work force, inventory and store count after a failed foray into selling higher-priced items, a strategy meant to lure in more upscale customers. Its cost cutting has mitigated lower sales but hasn’t been enough to stave off the string of losses. It recently took the unusual step of asking its suppliers to purchase some of its inventory for cash.

For the quarter ended Jan. 31, the company posted a profit of $6.66 million, or 21 cents a share, compared with a year-earlier loss of $31.8 million, or $1 a share. Both periods were affected by impairments, accounting impacts and a change in deferred revenue. Excluding them and other items, profit rose to 38 cents from 34 cents. A survey of analysts by Thomson Reuters expected a two-cent profit.

Revenue slumped 15% to $582.3 million as same-store sales dropped 11%.

Gross margin rose to 49.8% from 44% because of less discounting during tiffany key ring holiday-selling season.

Write to Joan E. Solsman at joan.solsman@dowjones.com

Tiffany & Co. Announces Opening of New Boutique in Mexico City

 Tiffany & Co., the 160-year-old American jeweler of international renown, tiffanys today the opening of its first boutique in Mexico City, Mexico.  The new 758 square foot (70 square meters) boutique is located in El Palacio de Hierro department store in the city’s Polanco neighborhood.
The new boutique features elements of the famous New York flagship store with cherry wood accents and stainless steel detailing on the showcases and the vitrines.  The product offerings include a wide range of Tiffany classic fine and engagement jewelry, the exclusive designs of Paloma Picasso and Jean Schlumberger, an assortment of Tiffany watches and clocks, sterling silver gifts and accessories.  The boutique also feature the new designs from the Tiffany Nature Collection.
“Tiffany & Co.’s ongoing growth strategy includes establishing and expanding our retail presence in tiffany bangles communities within important international markets,” said Jim Quinn, Executive Vice President.  “The opening of the Mexico City store demonstrates our excitement about the prospects and growth in Mexico.”
Ms. Andrea Artigas, previously the manager of Mexico City’s largest independent jewelry store, is director of the boutique and oversees all sales and operations.
While the Mexico City store marks Tiffany & Co.’s first location in the metro region, the company currently enjoys wide success and recognition through retail partners in selected Mexican resorts.  The new Mexico City store continues Tiffany’s expansion into major international markets and will allow Tiffany & Co. to better serve new and existing customers in greater Mexico City region.  Other important markets in Latin America include Brazil, Argentina, Panama, Paraguay, Uruguay, Honduras and Costa Rica.
Tiffany & Co. is the internationally renowned jeweler and specialty retailer.  Sales are made through Tiffany & Co. stores and boutiques and to retailers, primarily in the United States, Asia Pacific, Europe, Canada, the Middle East and Latin America.  Direct Marketing sales are made through Tiffany’s Corporate and Catalogue tiffany rings.  A publicly held company, Tiffany & Co.’s shares are traded on the New York Stock Exchange (symbol: TIF).
SOURCE  Tiffany & Co.
     CONTACT: George Rudenauer of Tiffany & Co., 212-605-4132

Jewelry’s New Dazzle

The 128.5-carat Tiffany diamond – and the smaller rocks in the cases around it – have long been the main attractions at the celebrated jewelry store on New York’s Fifth Avenue.These days, however, the crowds head for tiny lopsided golden hearts, gold and silver teardrops, lima-bean-shaped earrings, silver and ivory cuff bracelets and minuscule diamonds dotted along delicate gold chains and sold “by the yard” for necklaces.  The landslide success of these unlikely pieces has sparked the most revolutionary changes in serious tiffany since the Renaissance.  And oddly enough, it all began at staid old Tiffany’s, with the arrival of tempestuous Italian ex-model named Elsa Peretti.
Scion of a wealthy Roman family and a star in the New York fashion galaxy, 36-year-old Elsa Peretti is as elegant and unorthodox as the jewelry she designs.  She is equally at home in her chic, all-white mirrored penthouse in New York, on her wooden bench in Tiffany’s workshop and at the primitive chicken farm in Spain where she lives four months a year.  Passionate about almost everything, the 5-foot 9-inch Peretti creates a scene wherever she goes.  After one tiff with her fashion friend and benefactor Halston, she haughtily tossed her $35,000 sable coat into his fireplace and stalked out of his town house, leaving him to watch it burn.  She is also obsessed with her work as a designer and dedicated to perfection.  And this personal touch, her love of nature, her infallible taste – and, some say, her nearsightedness – have resulted in a whole new kind of jewelry meant to feel as good as it looks.  “Since Elsa and her chums,” says Henri Bendel president Geraldine Stutz, “nothing in jewelry has been the same.”
What Peretti had was a whole new idea of what jewelry should be: more design than decoration, with simple, soft, sculptural shapes, made of natural materials.  No longer serious, ceremonial and conspicuous, real jewelry has become accessible and affordable for every secretary and shopgirl.  It has also become a fashionable – and a faddish – as clothing, and as much an expression of individual taste and mood.  “If I have a pin on I feel more together,” says Chicago library executive Liz Mitchell, 30, who wears tasteful, one-of-a-kind pieces.  “There’s also a self-image thing: I feel more like a lady, more grown-up, more adorned.”
Like Peretti, many of the new jewelry designers have come from backgrounds in art or architecture, with little technical training.  Some still think of themselves as artists, fashioning each shape like a piece of body sculpture.  Others regard jewelry-making as a handicraft, like pottery, and jewelry classes around the country are filled with aspiring artisans.  Every Friday, Henri Bendel in New York holds an open jewelry call and nearly 100 would-be designers bring in samples, hoping for one lucky break.  Customers, too, are more jewelry-conscious, and sales are bangles.  “People are spending more for jewelry and they’re buying better quality,” says Kathy Capri, a buyer for Robinson’s department stores in Los Angeles.  “Customers want something of value.”
This insistence on value and genuineness – and a new interest in gold – have helped break down the lines between real and costume jewelry.  Such prestigious houses as Harry Winston, Bulgari and Van Cleef & Arpels still do a lucrative business in diamonds, emeralds, sapphires and rubies, but almost all of them have also started less-expensive boutique lines.  Some of Cartier’s best sellers include the $120 “rolling ring” made from three bands of different colored gold, Aldo Cipullo’s $500 “Love” bracelet and the famous $850 tank watch with Roman numerals.
At the same time, the costume houses are beginning to cash in on the quality market.  Designer Kenneth Jay Lane, who made his reputation in the ’60s by imitating “important” pieces in plate and rhinestone, will have his own line of real jewelry on the market this month.  Monet Jewelers, the largest costume house in the country, has started a real jewelry line called Ciani, priced from $10 to $500.
From the Pharaohs through the Romanovs to the Burtons, jewelry has always been an announcement of wealth and status.  The royal houses had their own jewelers-in-residence to display their worth with exquisite jeweled objets of cloisonne and gold.  More recently, designers like Jean Schlumberger at Tiffany’s created intricate, gem-encrusted jewelry for very rich Americans.  For most people however, good jewelry has meant a string of cultured pearls and a diamond engagement ring – and anything beyond that has been an object of distant reverence and jealousy, a passing gleam from the white-gloved arm of a woman stepping into a limousine.
All that changed in the 1960s, one of the casualties of the decade’s turmoil.  Among other transformation in values, small became beautiful.  It became chic to cut back, and vulgar – as well as dangerous – to show off.  Rich women and rich sauces were out.  And with the new consciousness came a new attitude toward jewelry.  “My feeling about jewelry changed – especially since I’ve been robbed three times,” says philanthropist Mary Lasker.  ”Most of the time I wear simple gold chains and fantasy pieces of little value.” Many rich women turned to costume jewelry: Kenneth Jay Lane’s copies of Tiffany, Cartier and David Webb made fakes fashionable for the first time since Coco Chanel.  Some women, like Marella Agnelli, even had pieces of their collection made up in costume – and kept the real jewels in the vault.  Others opted for lighter, simple pieces without ostentatious gems.  They wanted gold without guilt.
The ’70s brought a new interest in the environment, a desire to go back to basics and a recession that underlined the value of money.  Designers started using natural materials, and real wood suddenly had more cachet than fake gold.  Celia Sebiri chose to work with shells, Barry Kieselstein-Cord tried feathers and Peretti rediscovered silver, ivory and gold.  New themes came from nature and the environment.  Aldo Cipullo made jewelry of nuts and bolts and even a gold copy of a fly that landed on his desk.  Tiffany designer Angela Cummings, 33, studied shells and plants under a microscope for her designs and made a solid-gold barnacle.Peretti was inspired by everything.  A piece of a leather harness she spotted in Mexico bacame the famous horseshoe buckle.  A rattlesnake rattle evolved into her silver snake belt, a bout of depression led to the silver teardrop.  Once, when racking her brain for an idea, she came up with a campy “idea” light-bulb pendant in rock crystal with a gold filament.
Changes in fashion were themselves a major influence on jewelry design.  As women retreated to solid-colored rings, jewelry became the accessory that made the outfit new and distinctive.  Bold designs and one-of-a-kind sculptural pieces became essential wardrobe elements, and name designers started to make the jewelry that would be worn with their clothes.  Today Ralph Lauren Geoffrey Beene, Anne Klein, Mary McFadden, Pierre Cardin and Givenchy all put out jewelry collections.  Diane von Furstenberg, whose new line of tiny diamonds and lopsided hearts clearly derives from Peretti credits Elsa’s influence with making jewelry desirable again.  “She was the one who brought a totally new concept into the jewelry field, making things you want to touch and hold,” says von Furstenberg, whose jewelry collection will gross more than $2 million this year.  “That is what today’s jewelry is all about.
The tall, elegant, haughty-looking Peretti burst on the New York scene in 1968 – just as the vogue for tall, elegant, haughty-looking models was passing.  Although her classical aquiline features were not in demand, her looks and vibrant personality appealed to fashion designers Giorgio di Sant’ Angelo and Halston, who quickly befriended her.  During a summer visit to Sant’ Angelo’s house on Long Island, Peretti casually suggested she might like to design jewelry.  Giorgio promised to show it with his next collection, so Elsa went to work.  At a flea market, she had once bought a tiny bud vase on a chain, intended for the back seat of a Rolls-Royce, and with this and a drawing of a simple heart-shaped belt, she wrote to a friend in Barcelona to get them cast.  Santh Angelo and Halston showed the two pieces – with amazing results – and ever since the Halston has sponsored Peretti.  “I had this deep love affair with Halston without having a love affair,” she recalls.  “He was the pusher who made me successful.”
In 1972, Bloomingdale’s featured a Peretti boutique and soon she was the most-talked-about jeweler in the industry.  But there was no holding her back.  She wanted to work with precious stones and, in 1974, Halston and Carrie Donovan, then fashion editor of Harper’s Bazaar, arranged for her to meet Tiffany chairman Walter Hoving and president Harry Platt.  Unbeknownst to Peretti, Tiffany had been looking for a way to improve its stodgy jewelry image.  “We weren’t at all happy with out jewelry,” says Hoving – but he was smitten with Elsa.  On the basis of a brief conversation, a tiny coral bud vase that Elsa brought along and the Peretti jewelry that Carrie Donovan was wearing, Tiffany hired her on the spot.  Later, Platt drew up a five-year contract, which gives Elsa a percentage of the profits and restricts her jewelry designing exclusively to Tiffany.
No one could guess just how successful the marriage of the maverick Italian and the dowager queen of Fifth Avenue would be.  The store opened the Peretti collection with a real-life “Breakfast at Tiffany’s,” and it was mobbed.  For the next few months, thousands of customers a day crowded into the store, standing five-deep at the peretti counter.  It took Tiffany’s workrooms months to catch up on orders for “diamonds by the yard” alone; in the first year, the store sold 2 miles of them – plus 10,000 teardrops, 10,000 bean pendants and hundreds of $200 belt buckles and tiny evening-bag minaudieres .
Peretti has neither achieved nor taken her success lightly.She has gained 25 pounds, increased her intake of vodka, bracelets up her chain-smoking habit, and become so obsessed with her work that she often stays up late at night going over designs with Tiffany master jeweler Wilhelm Kalich.  She has also plunged into the frantic world of the New York fashion celebrity – with mixed results.  She is a close friend of Andy Warhol and hangs out a Elaine’s restaurant.  She kisses the air on both sides of Bianca Jagger’s cheeks.  She has learned to snap back at the paparazzi who follow her, and some say success has spoiled her.  “She’s not really pleased with the inside Elsa.” guesses Giorgio di Sant’Angelo.  “She has forgotten about real Elsa who had sweetness and humor and who didn’t need to have champagne every minute, make scenes like a child and be the focus of attention all the time.”
There is no showbiz nonsense about the Peretti who works for Tiffany, however.  Many of her ideas come from the trips she takes four or five months each year to Hong Kong and Japan, often with Harry Platt or Tiffany design director George O’Brien.  There she supervises the craftsmen who carve her tiny bud vases out of semiprecious stone and lacquer her magnolia-wood minaudieres using their ancient arts.  In New York, she works at a bench in the seventh-floor workroom at Tiffany’s, where 85 per cent of the gold jewelry sold on the first floor is made.  She designs with almost slapdash flair, but then translates the drawing into a meticulous wax model, shaving it to hairline perfection.  The model is used to create the mold for gold and silver pieces.  She also supervises the machines that stamp out shapes like her silver cuffs, which are then hand-finished.  Even in the workshop, the Peretti method is revolutionary.  Most jewelers work from intricate intricate three-dimensional sketches in which each jewel is specified and drawn by the designer.  Elsa and Kalich work on a doodle pad, going over the scrawled lines of a new design again and again.
Peretti became a career woman almost by accident.  Her father, Ferdinando, was a Parma businessman who moved to Rome with his wife, Maria Luigia, and dedicated himself, with considerable success, to building a fortune in the oil business.  Elsa and her sister Mila grew up in a Renaissance palazzo near the Villa Borghese with most of the privileges money could buy: Finishing schools in England and Switzerland, vacations on the Riviera in the summer and at Gstaad in the winter, and all the comforts of Rome.  But life with Father Peretti, who founded the API oil company, had its drawbacks.  An old-fashioned Italian Roman Catholic father, he believed that a woman’s place was in the home.  Elsa was the youngest child, but her status as the favorite was threatened by bitter clashes with both parents.  “She was always warm and calm,” Mila remembers of Elsa, “but she wanted more freedom to be her own person – not the person father prescribed.”
Elsa took after Signora Peretti, herself a painter.  “She always had a great feeling for design and color,” recalls her mother, who now lives by herself in Switzerland, where she paints, writes and practices yoga (Elsa’s father has retired in Monte Carlo).  “When she was little she drew marvelous figures of animals, angels and such.  She also had a wonderful sense of touch – curiosity in her hands, I call it.”
At 21, Elsa left home.  She fled to Switzerland and got a job at her old finishing school teaching languages and skiing.  “The day after her birthday, she simply walked out of the house and never returned,” Mila recalls.  “It was a great family scandal.” Peretti and her parents barely spoke to each other for eight years – but on one of those occasions her mother persuaded her to return to Rome, where she spent two years getting a degree in interior design.
During those years, Elsa fell in love for the first time, with an Italian publisher, and even got engaged to be married.  Fifteen days before the wedding date, she bolted for Switzerland again.  “Sometimes I feel I am like an animal,” she explains now.  “Whenever I get closed in, I have to run, to get away.” She landed in Milan, where she worked with an architect for a year before moving on to Barcelona.  Elsa was fascinated by Spain and fairly successful as a model – especially on assignments where she wore a blond wig. “I was fantastic, I was a different person in that wig,” she says.  She moved to New York four years later and found friends, fame and fortune, but Peretti still hasn’t found the man she wants to marry.  “Because I am very involved in my work, I do not know very much about men,” she says.  “I am like a little girl.  I got hurt a few times and so . . .”
But Peretti keeps growing, and her jewelry becomes more symbolic.  She has designed a crucifix and a yinyang “cufflinks of life,” and is making a Madonna.  “These things mean something as well as being beautiful,” she says.
That sort of seriousness about jewelry is increasingly common.  “What was missing was the marriage between the designer and the product,” says Laura Kruger, who opened a one-of-a-kind jewelry gallery on Madison Avenue eighteen months ago representing 30 artists from all over the country.  “Like graphics, jewelry should be signed.  There’s no reason a dumb rock should command higher prices than someone’s creative process.” Barry Kieselstein-Cord, who studied at Parsons School of Design, thinks of his jewelry as “portable art.” Each piece is cut by hand, and signed.  Kieselstein’s sculptural butterfly and horseshoe shapes in silver attracted so much attention that Georg Jensen set up a boutique for him in 1974.  Now he is on his own.  “Jewelry has returned to being an art form,” he says.  “It was art in the Renaissance and then we lost it to mass production.”
Robert Lee Morris, who designs heavy, hard-edged gold and silver pieces, considers himself “an architect designing forms for the landscape of the body.” His necklace of cylindrical shapes strung perpendicular to the collarbone moves with the body.  “It describes the neck in terms of straight lines,” he explains.  “It defines the neck in rational – not lyrical – terms.” Maureen Lasher and her partner Jeanne Wertleib have started doing inlay work using ivory, bone and acrylic colors with their sculptural bracelets.  “We work directly with the metal using torches, hammers and saws,” says Lasher.  “We don’t cast.”

Tiffany’s Prince of Whimsy Takes a Posthumous Bow

It was after store hours and the president-elect slipped in by a side door. He was alone and had 15 minutes to spare. A society friend who also happened to be a diamond expert met him at an elevator, which to this day is so discreetly situated as to seem a portal to some secret club.
The two men rode to the second floor of tiffany & Company, where, in an atmosphere combining boudoir satin and the hush of a boardroom, the Jean Schlumberger salon could be found. The president-elect was shown gems designed in naturalistic shapes — some of whimsical fruits, some of chimerical sea creatures — and briskly chose one to present to a person of a sometimes whimsical and chimerical nature, who had recently given birth to his son.Â
The brooch that John F. Kennedy bought for Jacqueline Kennedy is made of numerous small faceted rubies and diamonds. Although its cost is a Tiffany & Company secret, a similar piece would cost $30,000 today.
That the berries on it appear to be strawberries is a slight deception. “They’re neither strawberries” nor any other specific fruit, explained Harold Koda, the curator of the Costume Institute at the Metropolitan Museum of Art, where the brooch is the sole piece of fine jewelry chosen for display in the blockbuster exhibition “Jacqueline Kennedy: The White House Years.”
The pin, Mr. Koda said, is a superb example of the abstractions from natural shapes of its designer, Jean Schlumberger. A defector from the cult of modernism, Schlumberger created jewelry whose forms originated in what one critic called “a parade of flora, fauna and everyday objects.” Schlumberger’s particular genius was an irreverent tendency to skew the natural and flout the conventions of the jeweler’s trade. His were the sort of eccentric designs Mrs. Kennedy apparently could appreciate; she wore the brooch upside down.
“Schlumberger would probably have liked that,” Mr. Koda said. The jeweler, who died in 1987, is now the subject of a new book, “The Jewels of Jean Schlumberger” (Harry N. Abrams) and a long overdue reappraisal.
Of the work of the three designers whose jewelry is sold under their own names at Tiffany’s — Elsa Perretti and Paloma Picasso are the other two — Jean Schlumberger’s is “by far the finest in the repertoire,” said Amy Fine Collins, a jewelry collector and fashion writer for Vanity Fair.
Vogue once called Schlumberger a “Renaissance goldsmith in the middle of the 20th century,” although he was nothing of the sort. One of five children born to a well-to-do family of textile manufacturers in Alsace in 1907, Schlumberger had no formal training as a jeweler. Defying his mother’s warning that by becoming a designer he would forfeit his right to dance with his clients, Schlumberger began his career making buttons for Elsa Schiaparelli in the 1930’s.
He went on to create dresses for the American fashion house Chez Ninon, and in 1956 he was invited bybanglespresident, Walter Hoving, to begin an association that would last decades. It earned him a client roster — the Duchess of Windsor, Babe Paley, Bunny Mellon, Diana Vreeland — that definitively proved his mother’s auguries wrong.
“Johnny was, first of all, a man of very refined taste,” said Oscar de la Renta, whose first wife, Francoise, was an early client. Schlumberger insisted he was not, in fact, a jeweler at all. “I am only a pencil,” he said. “My drawing is paramount.”
He avoided the flatness common to most jewelry design by conceiving of his jewels in three dimensions. He treated fine gemstones as casually as paint box colors. He drew almost by reflex, in a cluttered Tiffany’s office, usually against the burble of domestic tragedy on the radio soap opera “Our Gal Sunday.”
He was unconstrained in his fusion of natural forms. “The most constant feature of the documentation I use is that it has no relation to jewelry,” he once said. In a Schlumberger universe, birds had the tails of sea creatures; diamond seahorses wore wings. He deployed materials with the freedom of someone largely innocent of jewelers’ techniques.
“He didn’t even have academic training for drawing or the European jeweler’s training, so he didn’t have the do’s and don’ts,” said Pierce McGuire, director of Tiffany’s Schlumberger salon, where the pieces kept on view since the house bought the jeweler’s estate in 1991 amount to a form of retrospective, albeit one in which the exhibits are for sale: the paillonne enamel bracelets that are what a Tiffany’s spokeswoman called “the quintessential” Schlumberger objects, average $25,000.
“People don’t come in and buy one piece, they buy six,” Mr. McGuire added. “I’m shocked that they have the dough.”
Above all, Schlumberger deplored the use of gems for the monetary worth of their stones. “Most of the time,” he once wrote, “one might as well pin a check to someone’s lapel.”
Although Schlumberger jewelry, Mr. McGuire said, formed only a small part of Tiffany’s $1.6 billion sales in 2000, his is nevertheless a name to reckon with among collectors. “He’s certainly one of the most sought after and readily recognizable names,” said Carol Elkins, a jewelry specialist at Sotheby’s.
With Schlumberger, said Joan Agajanian Quinn, a director of the California Film Commission and a longtime Schlumberger collector, “it’s not about the size of the stones or the carat weight, it’s about the design.” In the market innocence of the late 1970’s, Ms. Quinn and Andy Warhol would scour Manhattan jewelers for Schlumberger’s then-unrecognized works. “The first piece I bought was ‘L’Oiseau,’ ” a fantastical sapphire bird, Ms. Quinn said. “I had to hide it from Andy so he wouldn’t snap it up first.” In those days, Ms. Quinn added, “People weren’t so aware of rings single thing in design.”
In a career during which more than 3,000 of his jewelry designs were realized, Schlumberger created few objects more characteristic of his inclinations and peculiar talents than the “Meduse.” A domed surface set with luminous moonstones forms the iridescent back of a jellyfish; tiny diamonds are held between the lesser stones. The articulated golden tentacles suspended beneath the body trail through a volute of faceted amethysts suggestive of jellyfish propulsion.
“He had a witty take on things,” said Jared duPont Goss, a curator of 20th century design at the Metropolitan Museum of Art. It was not entirely new, Mr. Goss noted, for jewelers to portray the unusual or macabre. The French jeweler Rene Lalique, for example, “was doing some pretty scary stuff at the turn of the century,” he added. “Bats and spiders, horrifying monsters and snakes.” What Schlumberger did, he said, was “to treat it all more whimsically.” Whimsy, of course, has never come cheap at the level purveyed by Mr. Schlumberger. The “Meduse,” of which only four examples have ever been made, costs $85,500.

January marked the fifth month of retail gains

Deal seekers and gift-card recipients helped roll the nation’s retailers out of the holiday season, as sales rose 3 percent in January compared with a year ago.

The results, compiled by the International Council of Shopping Centers, marked the fifth month of gains. But sales were so bad a year ago — a decline of nearly 5 percent — that beating that figure wasn’t much of a challenge.

“We don’t think it signals the consumer is coming roaring back,” said Ken Perkins, tiffany of Retail Metrics Inc. “There are too many headwinds on the job front.”

During January, employers made the biggest payroll cuts in five months, slashing 59 percent more jobs than they did during December, according to the global outplacement firm Challenger, Gray & Christmas.

Such job-loss fears have cooled consumer confidence, which in recent months had been showing rays of hope. Nearly two-thirds of Americans now say they are less comfortable financially than they were six months ago, according to an RBC Index survey released Thursday. And about half of consumers — 46 percent — believe their local economies are weak, and only one in three expects the local job picture to improve by summer.

For retailers, January is the least important month on their calendar. It’s mostly a month of clearance and transition, Perkins said. Gift cards sales provided a small bump in sales, mostly in the first two weeks of the month.

In all, about three-quarters of the nation’s biggest chains beat expectations, including teen and specialty apparel retailers, department stores and discounters.

Minneapolis-based Target came in below its peers, posting a slight 0.5 percent gain among stores open at least a year. Same-store sales results are a key measure of retailer’s health because they factor out the sales gains that come from opening new stores.

Target has struggled more than some other discounters during the recession because it has a higher mix of tiffany bangles items, such as designer clothing, home furnishings and furniture. But CEO Gregg Steinhafel said in a statement that Target’s apparel and home categories were positive for the month, a sign of improvement.

Target shoppers made about 2 percent more purchases during the month compared to last year, but continued to spend less at the register. Household basics such as food, health care and beauty continue to be strong, with increases in the middle to high single digits. Sales of televisions and electronics were slow, as were seasonal home decoration items, the company reported.

The retailer expects similar sales results for February.

Macy’s reported a 3.4 percent rise in same-store-sales in January, but a drop of 0.8 percent during the quarter. Confident that its “My Macy’s” strategy to localize merchandise mix in its stores is kicking in, however, Macy’s raised earnings guidance for both the quarter and the year.

While Macy’s doesn’t release results on individual stores, CEO Terry Lundgren said the retailer’s 10 top-performing regions had all been pilots for the localization effort, which includes Minnesota.

Menomonee Falls, Wis.-based Kohl’s also raised profit views after same-store sales soared 6.5 percent.

Teen retailers, which haven’t posted positive same-store sales since June 2008, saw a 7.2 percent gain, which Perkins called a “big upside surprise.”

Upscale retailers are showing signs of life, too. Saks posted a 7 percent increase in January compared with last, and tiffany rings & Fitch had an unexpected 8 percent boost. Tiffany’s, Williams-Sonoma, Nordstrom and J.Crew reported strong holiday sales.

“We’ve been noticing in the last month or two that the high-end consumer seems to be coming back,” Perkins said. “That’s encouraging because they disproportionately spend more than the rest of the middle- and lower-income consumers.”

Jackie Crosby –612-673-7335

Signet Group, Tiffany, Big Lots, Sears Holdings and Tuesday Morning

Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include Signet Group (NYSE: SIG), Tiffany (NYSE: TIF), Big Lots (NYSE: BIG), Sears Holdings (Nasdaq: SHLD) and Tuesday Morning (Nasdaq: TUES).

Zacks Industry Rank Analysis is written by Dirk Van Dijk, CFA, Chief Equity Strategist, Zacks.com.

Retailers on the Rise

While with Valentines Day almost upon us, jewelry purchases might not seem that frivolous, but in the bigger scheme of things, does anyone really NEED tiffany? It is among the most discretionary of discretionary purchases. The group is relatively small with just four firms in it, but it moved up 57 spots to land in 9th place out of the 255 industries we now (just revamped and up from 206) cover.

The overall Zacks Rank for the group is 2.00 — a nice improvement from the 2.75 it had last week. The two firms sporting coveted Zacks #1 Ranks were Signet Group (NYSE: SIG) and Tiffany’s (NYSE: TIF).

The customer profile for the average shopper at Big Lots (NYSE: BIG) could not be more tiffany bangles than the profile for the average shopper at Tiffany’s. Yet it too sports a Zacks #1 Rank and is part of the Discount Retailers. That group now sits in 22nd place after an improvement of 10 spots. Its overall Zacks Rank is at 2.31 vs. 2.38 last week. Other Discounters with Zacks #1 Ranks include Sears Holdings (Nasdaq: SHLD), the owner of K-Mart, and Tuesday Morning (Nasdaq: TUES).

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Study: More consolidation imminent for jewelry industry

NEW YORK-Book lovers browse at either Borders or Barnes & Noble. Home improvement honchos park themselves at Home Depot or Lowe’s. Techno types load up at Best Buy or Circuit City. So will there come a time when jewelry buyers browse mostly at Zale or Kay Jewelers?

It could happen sooner man you think, according to a new study by investment banking firm Financo, shared exclusively with NATIONAL JEWELER, which predicts that the jewelry industry will see significant consolidation, especially over the next year.

“The U.S. jewelry industry is on the precipice of a major restructuring at both the retail and tiffany manufacturing level,” the report concludes. “Companies need to move quickly to ensure their long-term viability.”

The end result: a lot more big players and fewer smaller ones ultimately left standing.

Regional and smaller chains are finding it harder to compete, and several-most notably Friedman’s-have filed for bankruptcy recently, making them ripe for acquisition by investors, the study says, noting that Ben Bridge Jeweler, Helzberg Diamonds and Fortunoff are among those that have already been snapped up by investors.

Meanwhile, the companies that are strong are poised to grow stronger. With $4.1 billion in sales between them, ZaIe Corp. and Sterling’s U.S. chain, Kay Jewelers, represented about 7.6 percent of the estimated S54 billion spent on jewelry and watches in 2003. (And the two will claim even more this year, according to NATIONAL JEWELER’S $100 Million SuperSellers report, included with this issue).

Still, 7.6 percent isn’t much compared to Baines & Noble and Borders, the “duopoly” that dominates 42 percent of the nation’s book market. But it’s not so far afield from the sporting goods industry, in which another two companiesDick’s Sporting Goods and The Sports Authority-have, in recent years, managed to command 9.8 percent of a market that used to be void of major players.

Dominated by regional players-for now

Historically, the jewelry industry has been more fragmented than other retail industries. In 1999, independent bangles made up 44 percent of the market, chain stores 12 percent, department stores 22 percent and mass merchants 6 percent, according to the Financo report. But by 2003, the independents held just 36 percent of the market share, while chains commanded 14 percent, department stores held 12 percent and mass merchants nearly doubled their grip on the market with 10 percent.

“Jewelry is still dominated by regional players and that is the result of two things: the historical control that De Beers has had over supply, and the emotional and high-ticket nature of jewelry purchases that drives consumers to make their decisions on a local level,” says Michael O’Hara, managing director of Financo.

But the former has certainly changed in local years, as De Beers’ rough stockpiles have diminished and competition has heated up with rivals like Israel’s Lev Leviev, who has control of diamond mines and manufacturing facilities in areas coveted by De Beers, along with a 50-50 partnership with luxury retailer Bulgari.

As for the emotional nature of jewelry, that seems to be changing too, O’Hara says. Wal-Mart, for instance, sells more jewelry than any retailer in the country, though it only amounts to about 1 percent of its overall sales.

“What happens if Wal-Mart becomes really good at it?” O’Hara asks. “[Diamond] cert programs are allowing the mass channel to legitimately sell product that has traditionally been sold elsewhere.”

The rise of Zale and Kay at the malls

Among jewelry-only chains, Zale and Kay remain the clear leaders, particularly in malls, where competition has driven many independents out.

“Zale and Kay are in almost any mall they want to be, so there would first be consolidation in that channel,” O’Hara says.

One factor driving the continued consolidation is the rise of computerized inventory systems that help retailers keep track of what is selling and what isn’t.

“You need to be able to afford to have high-quality systems, computers,” O’Hara says. “What’s happening in other rings is, they’re not able to keep track of their inventory and they’re losing out to these mass marketers. We don’t have that yet in the jewelry industry.”

But increasingly, those who cannot afford the technology could lose out to those who can. One company that has demonstrated the power of technology is Blue Nile, the online diamond site that materialized five years ago, seemingly out of nowhere, and now sees $170 million a year in business. “They’re posting $1 billion dollars in inventory and only selling $200 million a year,” says David Inauen, a Financo associate. The only thing that might limit Blue Nile’s rapid rise: There is only so much inventory that suppliers will be willing to provide, given that their sales are such a small percentage of their online inventory.

But Zale or Sterling would be smart to follow Blue Nile’s lead by offering in-store customers a computerized inventory beyond what is physically on the shelves.

Meanwhile, the nation’s third largest jewelry-only chain Friedman’s, now in Chapter 11 bankruptcy, is a likely candidate to be bought by an investor as part of a “363 sale,” which would allow someone to buy the chain’s assets so that it can operate outside of bankruptcy to improve its financial picture, O’Hara says.

Financo’s jewelry industry consolidation study forecasts a tumultuous season for the retail jewelry industry. The changes and possible shake-ups include:

* Increasing strength of certified jewelry in the mass channel, including Wal-Mart, Target, Costco, Sam’s Wholesale Club and BJ’s Wholesale.

* Marginalization of mall-based jewelers, forced to compete on promotional pricing and promotional consumer credit offerings.

* Changing supply dynamics as luxury players (such as Tiffany and Bulgari) and large jewelry retailers (such as Zale and Signet Group) seek to vertically integrate rough procurement, cutting and polishing design and/or manufacturing.

* Attempted differentiation by the development of jewelry brands-both national brands (like Hearts on Fire) or bracelets brands (like the ZaIe Diamond).

Tiffany Signs a Licensing Deal With Glasses Maker Luxottica

Tiffany & Co. signed a 10-year license with Italy’s Luxottica Group SpA to develop the tiffany first-ever eyewear line, a deal that highlights luxury-goods companies’ increasing penchant for sunglasses to boost visibility and sales.

Luxottica, which also makes glasses for brands such as Chanel, Bulgari and Polo Ralph Lauren, will design, produce and distribute the new Tiffany line of sunglasses and prescription eyewear, say officials at both companies. The first collection is scheduled to hit Tiffany boutiques and select eyewear stores in the U.S. and Japan in about a year.

Luxottica expects the license to ring up 50 million euros, or about $67 million, in sales by the third year, and Tiffany will get a percentage of royalties on those sales, the officials said.

The contract is a rare diversification for Tiffany, which has always been cautious about expanding its brand. Eyewear represents Tiffany’s second license after perfume, and the jeweler has trailed rivals in developing an eyewear business. French jewelry brand Cartier, for example, has been selling glasses since 1982, and Italian bangles brand Bulgari signed up a collection with Luxottica in 1997.

Other luxury-goods brands such as Chanel, Prada and Gucci have also embraced the eyewear business as a way to boost sales and expand their consumer base by offering lower-price, yet fashionable, products. A pair of brown Gucci sunglasses with the brand’s traditional horse-bit motif sells for $250, compared with $765 for a classic double-G logo canvas tote bag. Eyewear is also a profitable business because the markup for branded glasses is high.

“Eyewear has become a true luxury and fashion accessory … in the region of accessible prices,” Luxottica Chief Executive Andrea Guerra said in an interview.

For Tiffany, the sunglasses venture is part of an effort to raise brand awareness and increase sales. The jeweler, based in New York, has doubled the number of stores and boutiques it operates world-wide to 164 over the past 10 years. The visibility of Tiffany-branded sunglasses will go beyond the jeweler’s own retail network because the eyewear will be sold in about 5% of eyewear stores and other outlets around the world. Those include the LensCrafters and Sunglass Hut chains, which Luxottica owns.

Jon King, Tiffany’s executive vice president for merchandising, said the new shades will be bold and incorporate design elements from the jeweler’s most popular collections. Those elements include a stamp from an 1837 jewelry line with Tiffany’s name and founding year, or Roman numerals from an existing collection called Atlas. Luxottica rings prices to range from $220 to $350, while special editions for markets such as Japan could sell for as much as $10,000.

The Tiffany deal caps off a strong run for Luxottica in capturing major licenses. In February, the company snagged Polo Ralph Lauren from rival Safilo Group SpA. Luxottica plans to halt four licenses, including Sergio Tacchini and Moschino — to focus on its bigger brands.

For Landlords, Jewelry Stores Are Big Gems

Driven by strong sales and the rise of jewelry as a fashion item, some of the industry’s major players are paying top dollar to open new stores or expand current locations. From high-end Tiffany & Co. to Zale Corp.’s Piercing Pagoda — a teen favorite for belly-button rings — jewelry retailers at every echelon are vying for bigger, better space in key cities and shopping centers.

Watch specialist Tourneau Inc.’s new Las Vegas store is about 16 times larger than the one it replaced. tiffany jewelry bling-master Harry Winston, meanwhile, plans to open a three-story flagship store on Rodeo Drive in Beverly Hills later this year. A handful of jewelry designers, including David Yurman and Judith Ripka, are opening stand- alone stores after years of relying on department stores for distribution.

“The jewelry category within retail has been one of the hottest in the past 18 months,” says Jim Okamura, a senior partner at retail consulting firm J.C. Williams Group Ltd. At Mills Corp., which owns 42 malls in the U.S., leasing of new space by jewelry tenants is up 70% over this time last year, according to Mills spokeswoman Becky Sullivan.

Behind the love affair between jewelers and landlords is an explosion of demand for everything from classic engagement rings and pearl strands to more fashionable “right hand” diamond rings and other colorful baubles featured in magazines like InStyle.

While young buyers are avid consumers in the category, it’s the baby-boom generation — folks born from 1946 through 1964 — who are most richly adorning themselves. In particular, consumers aged 50 to 55 represent the jewelry trade’s “sweet spot,” says Ken Gassman, president of the Jewelry Industry Research Institute, an independent research and consulting group.

The craving for rings and things is helping results at some of the industry’s publicly traded companies. Last week, cufflinks said that sales at stores open at least a year rose a strong 11% in its fiscal first quarter, which ended in April. Zale, the biggest fine jewelry chain in North America, said earlier this week that its same-store sales rose 3.5% for the period ended last month.

Zale typifies some of the industry’s recent expansion patterns. This year marks the first since 2001 that the company will increase its store count, says David Sternblitz, the company’s treasurer. The chain is slated to open 65 new U.S. stores as well as 50 freestanding Piercing Pagoda stands.

Additionally, Zale has begun eyeing locations outside of traditional malls for both its Zales and Zales Outlet stores. Zale executives estimate that about $10 billion, or a third of the specialty jewelry market’s sales, are generated by independent jewelers at off-mall locations. “We feel there’s opportunity to capture market share in more of these neighborhood centers,” says Mr. Sternblitz.

Last year, Tiffany launched a new retail division called Iridesse, which sells pearl jewelry, opening up stores in malls in McLean, Va., and Short Hills, N.J. Four more Iridesse stores are slated to open this year. Within five years, the company expects to have at least 20 Iridesse stores open.

Landlords have a good incentive for courting this gilt market: Store owners can afford to pay top dollar for space. Jewelry sales in the U.S. hit $27.4 billion last year, a nearly 5% increase from 2003 and a nearly 10% jump from 2000, according to the Department of Commerce. Five years ago, a typical mass-market jewelry store in a shopping mall rang up $700,000 to $800,000 in sales a year. Today, that same store generates sales of $1.2 million to $1.5 million.

Although jewelry retailers typically take up a small amount of space — roughly 1,000 to 2,500 square feet on average — they have the highest sales per square-foot of any retail category and therefore pay some of the highest rents at the mall. That works out to about $68 a square foot, or considerably more than the rent paid by movie theaters (under $10 a square foot), women’s specialty stores (about $27 a square foot) or athletic shoe stores ($24 a square foot).

What’s more, the jewelry chains typically like to occupy high- profile space in a mall or retail center, such as the center court, which command the steepest rents.

But the retail march of big names in the jewelry and watch business isn’t all glitter. As chains like Zale move into more money clips, many local, family-run jewelry stores are feeling the pressure and closing up shop.

The number of jewelry retailers in the U.S. has been shrinking for the past decade, according to the Jewelers Board of Trade, a trade association. There were 24,765 jewelry retailers in the U.S. at the end of April, down from 28,497 at the end of 1995. “The larger guys may be branching out, but they’re eliminating independent retailers in the process,” says Dione Kenyon, president of the Jewelers Board. “We see more and more mom-and-pop operators dropping every year.”

(See related article: “Style & Substance: Diamond Store in the Rough — Opening of De Beers Boutique Will Test the Public Image Of Giant South African Miner” — WSJ May 20, 2005)