Pages

Tag for Google

Tuesday, May 18, 2010

Precious Stones Business

SIC 5094
JEWELRY, WATCHES, PRECIOUS STONES,

AND PRECIOUS METALS

This industry classification comprises establishments involved

in the wholesale distribution of jewelry, watches, precious

stones, and precious metals.Products of the industry include

clocks, coins, gem stones, pearls, precious metals bullion,

silverware, and trophies. Establishments primarily engaged in

the wholesale distribution of precious metal ores are included

in SIC 5052: Coal and Other Minerals and Ores.

NAICS Code(s)

421940 (Jewelry, Watch, Precious Stone,

and Precious Metal Wholesalers)

Industry Snapshot

According to the U.S. Census Bureau, the jewelry, watch,

precious stone, and precious metal wholesalers represented

approximately 8,215 establishments. Combined, these

employed some 54,408 people with an annual payroll of

$2 billion. In 2003, the total number of establishments climbed

to 12,936. The industry generated approximately $13.8 billion

in annual sales. The total number of employees reached 61,411.

The average sales per establishment were $1.10 million.

The majority of the establishments were smallemploying fewer

than five people. There were a total of 9,939 establishments

with fewer than five employees.

Jewelry, the largest sector of the industry, numbered 4,872

establishments and dominated more than 37 percent of the

market. Together, this group accounted for $4.8 billion in sales.

The jewelry and precious stones sector numbered 3,435

establishments and controlled more than 26 percent of the market.

Combined, this group generated $2.5 billion in sales. Diamonds

represented 1,327 establishments and controlled about ten

percent of the market, with $1.7 billion in sales. States with

the majority of establishments include New York with 2,981,

California with 2,685, and Texas with 1,143.

Background and Development

Jewelry is as universal and ancient a form of adornment as clothing.

It has been made of a variety of materials from human hair to

precious metals and gems, and has been used to signify

social status, wealth, official or political rank, holidays and

celebrations, and fad and fashion.

Its forms have included items

for the head (hairpins, headbands, crowns, earrings, and lip and

nose rings); neck (pendants and necklaces); chest (brooches,

cloak clasps, buttons); waist (belts and girdles); and arms and

legs (bracelets, anklets, and rings).

As an industry, jewelry has

been represented in all the major civilizations by goldsmiths,

metalworkers, gem cutters, and many others. The Byzantine

Empire (approximately the 6th to 13th centuries) with its profusion

of gold and enamel and the European Renaissance

(the 15th to 17th centuries) characterized by the use of

gemstone-emblazoned fabrics and chains, ropes, pendants,

and girdles were perhaps the greatest moments in

the history of jewelry.

Watches were developed around 1450-1500 when the coiled

spring made the invention of the pocket watch possible.

By the 17th century, crystal faces to protect the workings, bearings,

hairsprings, and balance wheels were standard. Watches were

handcrafted by skilled artisans until about 1800 when machine-made

parts led to mass production. Electric and electronic watches were

introduced in the 1950s and 1960s.

During the first few years of the 1990s, conditions within the jewelry,

watches, precious stones, and precious metals industry were

unstable. In 1993, the number of establishments was about

6,800 and sales were about $45 billion, which was up from

a 1990-91 low of about 6,000 establishments and $40 billion

in sales. High numbers of retailer bankruptcies, fluctuations

in international currency exchange rates, and the recession

in the United States and abroad led to reduced profitability

for wholesale dealers.

In January 1994, however, Jewelers' Circular-Key-stone

reported that conditions appeared to be improving. Some

diamond dealers attributed the turn-around to the repeal of

the federal luxury tax in 1993. During 1994, the heaviest

projected demand was for diamond jewelry, loose diamonds,

and karat gold jewelry.

Gem stones were also experiencing an upswing. Industry

forecasters expected growth in ruby, sapphire, emerald,

tourmaline, and tanzanite sales. The highest projected demand

was for stones in earth tones, such as orange and peach.

Pearl dealers also anticipated improving conditions.

Although high-quality Japanese pearls remained expensive

and in short supply, forecasters predicted that increased supplies

of Chinese freshwater pearls and South Sea pearls would help

bring prices down in the lower-quality sector of the pearl market.

This, coupled with increased demand, was expected to yield

higher net profits.

Watch suppliers also expected sales to increase slightly during

1994. Annual U.S. watch sales were pegged at 65 million units

with women's and jewelry watches, sport watches, upscale

watches, two-tone watches, stainless steel watches,

and watches with lighted dials remaining popular.

In the mid-1990s, jewelers were trying to lower their business

costs, increase productivity, and tighten their customer base to

increase profitability. The diamond trade was having especially

low confidence due to foreign competition.

The industry employed more than 50,000 and generated sales

of about $44 billion in 1998. Sales in jewelry stores increased

about 8.5 percent from 1997 to 1998 to $22 billion, and about 40

percent of sales occurred in the fourth quarter of 1998, in

keeping with traditional holiday sales trends. Other than jewelry

stores, gemstones, jewelry, precious metals, and watches are

sold by department stores, warehouse stores, home shopping

television, catalogs and showrooms, and over the Internet.

Over 28,000 jewelry stores across America accounted for

approximately half of the nation's jewelry sales in 1998.

Consolidation occurred as large chains purchased others,

and growth took place as these same chains expanded their

number of outlets in shopping malls. Zale Corporation acquired

Peoples Jewelers of Canada in June 1999, but Service

Merchandise (a major catalog showroom) filed for bankruptcy,

also in 1999; these events show that this industry is both highly

competitive and risky. Retailers have sought new ways of

improving product value. As a result, jewelry imports have

increased from 26 percent in 1983 to 52 percent in 1997.

With economic declines in Asia, Asian wholesalers have

turned to the United States and Europe with increased

volumes of exports.

Jewelers improved their prospects substantially in the late

1990s by better marketing and improved tracking of supplies,

demand, and sales; they also were able to capitalize on

simple demographics as the United States emerged from the

recession earlier in the decade with baby boomers reaching

their maximum earnings years and investing their income

in jewelry. The large jewelry chains were continuing to

consolidate into the 2000s, and retailers were optimistic

about trends and fashions in jewelry and watches and growth

of markets at a range of income levels.

Current Conditions

Jewelers credit the bridal business with 30 to 50 percent of

their revenue. Holidays and gift-giving opportunities, are also

major factors in sales of watches and jewelry. Year-round

spending and the growth of purchases among women of jewelry

for themselves have made jewelers less dependent on December

holiday sales, despite cyclic sales related to the economy and,

to a lesser degree, the seasons.

Jewelry sales also depend heavily on fashion trends. Colored

gemstones, designs from natures, diamonds in virtually any

form, yellow gold, white metals, princess-cut gemstones,

Tahitian pearls, and invisible necklaces are expected to be

among the most popular.

In precious metals, gold commodity prices have continued to

drop, but jewelry manufacturers and retailers have yet to

pass savings along in lower prices because, given the metal's

volatile price, they are protecting their ability to pay higher

prices for gold over the coming years. Forecasters expected

sales of silver jewelry and other white metals to remain strong,

with platinum is the strongest of the precious metals in sales.

China and Japan lead the world in consumption of platinum

jewelry.

Industry Leaders

The top 20 firms in jewelry sales consisted of about 50

percent jewelery specialists. Tiffany & Co., Whitehall Jewelers,

and the Piercing Pagoda were the only three companies with

both unit growth and sales that exceeded 20 percent. For

the industry as a whole, 1998 sales growth was 7 percent

(compared to 8.7 percent in 1997) and unit growth was 2.3

percent (3.8 percent in 1997). The two major television

shopping networks generated about 3 percent of industry-wide

sales in 1996 through 1998. Of the three corporate leaders,

Tiffany & Co. epitomized quality and name recognition worldwide;

in the second quarter of 1999, Tiffany's earnings increased 63

percent. Whitehall Jewellers, Inc., has 276 stores in 31 states

and has projected earnings growth rates of 30 percent and 22

percent for fiscal 1999 and 2000, respectively. Following a

massive reorganization in the late 1980s, Zale Corporation is

the largest specialty retailer (per 1999 statistics) with 1,300

stores in the United States, Canada, and Puerto Rico under

several firm names; they also have considerable direct mail

and online sales. The specialty jewelry market posted positive

results from 1998 through 2002, according to Jewelers'

Circular Keystone. Overall sales increased about 20 percent

over the five year period, falling only in 2001 to 2.2 percent.

Internet sales of jewelry and watches are anticipated to rise to

$56 million in 2000 and $140 million by 2001. Polygon Network,

Inc., maintains Web sites for approximately 3,000 retailers

and suppliers on six continents as well as providing online

information resources. The Network experiences daily

transactions of about $3 million and, as of 2000, holds

a loose diamond inventory valued at about $100 million.

Research and Technology

Sellers of diamonds are increasingly threatened by sales of

cubic zirconium and other, less expensive "diamond look-alikes".

The largest diamond marketer worldwide, De Beers, is

experimenting with "diamond branding" to mark the firm's name

and identification numbers on diamonds. Development of this

technique includes reader machines to detect the tiny, laser-cut

inscriptions. Production of synthetic gemstones continues to

be a strong research field.

De Beer's who had been in control of the synthetic diamond

market, had new rivals. Newly formed Apollo Diamond Inc.

located in Boston, Massachusetts, and Gemesis Corp. of

Sarasota, Florida had come up with a new technology for

producing manufactured synthetic diamonds within a lab.

De Beer's never dreamed the Russian technology would ever

be mastered. The actual manmade diamonds are created in

only a few days versus the natural diamonds that are mined

from under the earth.

used a process known as Chemical Vapor Deposition (CVD),

while Gemesis used a highpressure,

high temperature technique that imitates the geologic conditions

under which natural diamonds are formed. The diamonds were

expected to be sold about 30 percent less than the price of

a natural diamond. Gemesis had sold its yellow synthetic

diamonds through retail jewelers at about 10 to 50 percent less

than the manmade diamonds. Gemesis was working on producing

various other colors, specifically blue, by late 2004.


3 comments:

  1. "Hi, I Saw Your Link in Bing.com I Love Your Blogs Kindly See my Link Here a New Alternative Money Making Networkalternative to adbrite here

    "

    ReplyDelete
  2. Thanks for sharing this types of blogs. I like Your all Blogs, if you want to read more about Precious Stones Kindly See my Link Here Precious Gemstones online

    ReplyDelete
  3. You are going to need a business plan if you wish to secure investment or a loan from a financial institution. This site has more info about How to Bakery Name Ideas - The Ultimate Guide.

    ReplyDelete