Zale Corp. Reports Strong Holiday Sales for Second Consecutive Year

Zale Corp. said Tuesday that comparable store sales increased 5.9 percent, year-over-year, for the November-December holiday sales period. This increase follows an 8.5 period rise in the same period in the prior year.

Within this two-month period, comparable store sales increased 10.1 percent in November and 4.2 percent in December. At constant exchange rates, which exclude the effect of translating Canadian currency denominated sales into U.S. dollars, comparable store sales increased 6.2 percent for the holiday selling period, compared to an increase of 7.6 period in the prior year period.

Revenues for the two-month period increased 5.8 percent, year-over-year, to $564 million. Revenues include approximately $10 million resulting from the change in warranty revenue recognition.

Zale Corp. operates approximately 1,820 retail locations in the United States, Canada and Puerto Rico and has online operations for most of its brands.

Sales by brand and country:

* U.S. Fine Jewelry brands (which account for about 69 percent of annual revenue for the company), consisting of Zales Jewelers, Zales Outlet and Gordon’s Jewelers, had an increase in comparable store sales of 9 percent for the holiday period. This increase follows a 7.5 period rise in the same period last year.

* Canadian Fine Jewelry brands (which account for about 17 percent of annual revenue for the company), consisting of Peoples Jewellers and Mappins Jewellers, had an increase in comparable store sales of 0.2 percent. This increase follows a 15.6 percent rise in the same period last year. At constant exchange rates, Canadian Fine Jewelry brands comparable store sales increased 1.7 percent, compared to an increase of 10.2 percent in the prior year period.

* Kiosk Jewelry (which accounts for about 14 percent of annual revenue for the company) comparable store sales decreased 2.1 percent. In the same period last year, Kiosk Jewelry comparable store sales rose 4.2 percent.

In its outlook for the quarter ending January 31, Zale Corp. says it expects gross margin to be consistent with the prior year quarter’s gross margin of 50.3 percent. Operating margin is expected to be slightly below the prior year quarter’s operating margin of 7 percent due to higher selling, general and administrative expenses primarily driven by the holiday advertising campaign and marketing for the launch of proprietary products.

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Harry Winston May Purchase Second Canadian Diamond Mine

Ekati diamond mine. Photo credit: Jason Pineau, through Wikipedia

Harry Winston is in talks to purchase an important asset of BHP Billiton’s diamond business, according to published reports.

The Toronto-based company, which describes itself as a diamond enterprise with premium assets in the mining and retail segments of the diamond industry, has secured bank financing for a possible deal to buy the Ekati diamond mine in Northwest Territories of Canada, according to the Financial Times. However, the deal, which was to be completed by mid year is going slower than expected and could even break down.

Harry Winston, best known as a luxury jewelry and watch retailer, already owns a 40 percent share in the Diavik diamond mine in the same area with Rio Tinto, which owns a 60 percent stake.

Both BHP Billiton and Rio Tinto announced in November 2011 that they are looking to get out of the diamond business to focus on larger, more-profitable assets from their vast mining businesses.

It’s a complicated matter, according to the report, because if Rio Tinto agreed to sell Diavik to Harry Winston, it would make it more difficult for the mining giant to sell the rest of its diamond assets.

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More Activity During Second Day of Las Vegas Jewelry Week

29-Carat Vivid Yellow Beryl Ring by Miiori

There was a lot more activity during the second day of the JCK Luxury jewelry tradeshow Wednesday as more buyers and exhibitors are making their way to Las Vegas for the start of several other jewelry shows.

Two bracelets by Amrapali. The top one is covered in light-colored opals and the the lower piece features slices of light-blue sapphires.

Exhibitors are very positive about the overall economy and the jewelry industry outlook saying that consumers are coming back and are buying, although some say that consumers still looking for value.

The Serendipity Collection by Yael Designs features sliced rose-cut emeralds.

“I think people are much more positive than they were two years ago and they have the dollars to back it up,” said Brian Watkins, president of Ritani, a jewelry manufacturer that is developing a consumer e-Commerce website with independent retailers.

The "Pop of Color" engagement jewelry line by Danhov. At the far right end is the Tubetto men's wedding band.

Among the highlights of the second day were:

* Bridal jewelry designer Danhov introduced color its engagement rings with its “Pop Of Color” collection based on birthstones.

* Yael Designs unveiled an emerald jewelry collection centered high-quality sliced emeralds with a rose cut finish.

* Jewelry designer Miiori presented several new pieces using high-quality gems and diamonds in a number of creative ways.

* Indian jewelry designer Amrapali introduced several big colorful lines using a variety of gemstones.

Thursday (today), the Couture Show, which features some of the world’s best known luxury jewelry brands, opens at the Wynn Resort.

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