The value of diamonds lies on their physical properties that make them suitable for many applications. Natural diamonds are only of high value if they are scarce in nature. Realizing this, De Beers Consolidated Mines was formed to control the supply of diamonds from mines across the world. The diamond market is influenced by mine production, rough diamond distribution, preparation/cutting, and retail markets. The project will be concentrating on the retail markets for diamonds and other high end jewelry.
Jewelry purchases are highly discretionary because they are heavily affected by adverse trends in the general economy and are measured by disposable consumer income. The first half of fiscal 2003 can be described with a lackluster economy, lower consumer confidence and an unstable geopolitical environment. However, general economic conditions and consumer confidence improved in the second half of fiscal 2003, resulting with increased sales. Since the economy has taken some major strides towards recovery, the jewelry industry represents a bullish market. Large and small retailers are evaluating expansion opportunities outside of the traditional regional mall venue. With this in mind, it is the intention of this paper to assess the comprehensive strategies of the cyclical retail jewelry industry.
In this highly competitive industry which is extremely sensitive to the level of discretionary consumer income and the subsequent impact of the type of good purchased, competitors include foreign and domestic guild and premier luxury jewelers, specialty stores, national and regional jewelry chains, and department stores. To a lesser extent there exist catalog showrooms, discounters, direct mail suppliers, televised home shopping networks, and jewelry retailers who make sales through internet sites.
It is a highly fragmented US market estimated at approximately 54 billion dollars. The breakup of the industry is accordingly: mass merchants representing 10%, chain jewelers with 100+ stores as 14%, chain department stores representing 12%, TV home shopping with 4%, independent jewelers taking the largest share at 36% and other (general, misc.) accounting for 24%. (Please refer to exhibit E)
The specialty retailers with the highest sales are Zale Corp ($2.2Bn), Signet US($1.7Bn), Tiffany ($.8Bn) other players include Friedman’s ($.4Bn) Whitehall ($.3Bn), and Samuels ($.1...
... middle of paper ...
...d consignment terms have become the norm for wholesalers to extend to their retail partners. A good proportion of the inventory costs are transferred to wholesalers through these consignment purchases. Since jewelry is not a perishable good such as the garments and shoe industries, it still works as an asset even if the retailer returns the merchandise back to the wholesaler.
The amount of power that a retailer has is directly correlated to the size of their operation. Only a few companies command extensive volumes. To fill the capacity present in most factories owned by wholesalers they require these volumes to remain profitable. Due to these factors, the major chain stores are able to leverage better financing, costs, and payment terms than the rest of the industry. The largest percentage of jewelers can be categorized as independent jewelers accounting for 36% of the overall market. Their ability to leverage power comes from their financial credibility in the market. Jewelry, being a luxury good and furthermore having high costs leads to great losses in the cases of defaults. Thus, the financial strength of these companies dictates the amount of power they have in the industry.
Foxy Originals’ current success reside in its owners’ experience, fashionable products, pricing strategy, along with its current market presence. However, one of company’s key assets is its capability to produce high-end jewellery while maintaining manufacturing costs at a minimum. By combining high quality along with low prices, Foxy Originals was able to attain market share at an unparalleled rate. Gaining a decent market share equipped the company the brand recognition it required to secure shelf space at 250 boutiques nation-wide. A resilient market presence has transformed into a healthy financial improvement that permits the company to continue its current operations while exploring possible expansion opportunities. Moreover, Foxy Originals owners, Kluger and Orol, are most favourable aspects of the company. Orol’s parents operated a successful metal manufacturing company,
For the past 112 years, De Beers has dominated the diamond industry. Established in April 1880 by Cecil John Rhodes and his partner, Charles Dunell Rudd, De Beers rose to prominence, merging with Barney Barnato’s Kimberley Central Mining company and acquiring more and more mines (Hauser, 2002). The ...
Specialty retailers cater to a narrow or niche audience – either by location, type of customer or product mix. On a national level, specialty retailing is dominated by national chains, such as office supply store Staples or electronics outlet Best Buy.
The Stefani B Collection should come up with a segmentation process. The following factors that should be in the process contain the following: sustainability, measurability, accessibility, serviceability. Sustainability is about ensuring a large enough customer base to make sufficient sales and profit. The brand should also consider the potential for future growth. It is important to connect with the customers, having a variety of merchandise that keep customers interested. Next, measurability is thinking of the store’s size and buying power. An example of this would be thinking of a high school coming in to match jewelry with their prom dresses; how many high school seniors attend that school or what is the average income of families
Final contribution of de beers to the diamond pipeline is the promotion of diamond jewelry for the industry; through advertising campaigns developed from extensive market research; trade promotional activities and jewelry design competitions
The century old diamond empire, reached a height of over $4 billion in sales 1998. Eventually, De Beers changed hands to a German, Ernest Oppenheimer, at the turn of the 20th century. De Beers’ most formidable opponent was not another diamond company, but rather the U.S. Justice Department. Constantly faced with Anti-trust regulations, De Beers managed to elude all charges over the course of thirty years, by selling only indirectly to the U.S. All their business went through London first. As De Beers’ supply chain indicates (Exhibit 1), their relationship with U.S. diamond dealers and the U.S. government is unique among international companies as they remain at arms length from the U.S. with the intent to keep the government at bay. That relationship came to a halt when the U.S. Justice finally prevailed and De Beers pleaded guilty to price-fixing. The cartel was fined $10 million1. This, even now, has paved a new opening to “re-enter” the U.S. diamond market. With Nicky Oppenheimer and Gary Ralfe as the new De Beers leaders, this was an opportune time for De Beers to reinvent themselves on the U.
The African Diamond Trade is a large cycle of exploitation. An estimated 65% of diamonds mined worldwide originate in Africa (Cahill 2009). In 2016, the U.S. diamond industry grew 4% to reach $40 billion, approximately half of a global $80 billion industry (DeBeers Group 2017). But how do these diamonds make it from African river banks to American engagement rings? According to Time Magazine, there are 6 steps that take diamonds from the ground to the jewelry store; exploration, mining, sorting, cutting and polishing, manufacturing, and retailing (John and Jones 2015). Each of these steps adds value to the final product that is offered in jewelry stores worldwide but this value isn’t added fairly to those who create the most value.
Cynthia also has an opportunity to expand the line of jewelry. Right now this is an area that is very strong and if it continues to grow it will help to make the company an even stronger competitor in the industry. Recently Cynthia Rose added a selection of jewelry to her showroom. The first appointment she had in the showroom with the jewelry she had 3 sales.
The core business of M/s. Meena Jewellery Exclusive Pvt. Ltd. is Jewellery.Promoters of the said unit have the expertise in the jewellery section and they want to expand their business in jewellery section only, by focusing on the same. Moreover, they aren’t experts in retail
Santarossa, B. (2004, January 13). Diamonds: Adding lustre to the Canadian economy. Retrieved November 06, 2017, from https://www.statcan.gc.ca/pub/11-621-m/11-621-m2004008-eng.htm
ix. Since India already enjoys 80-85 per cent of the world CPD market, scope for further growth in diamond exports is limited. Hence, if India's gems and jewellery sector is to substantially increase exports, the best bet lies in the jewellery sub-sector. Given the fact that the global market for stone-studded jewellery is expanding, there is scope for expansion in India’s diamond-studded jewellery exports as well.
Due to the good establishment of the business, it has huge market national. The company has therefore opened many retail shops and stores all over the country to ensure that their products are accessible to the customers. The entity provides a favorable environment, and many clients view the place as a fun shopping place to be. The retailer has targeted a big pool of customer because of the variety of products it sells. The stores products vary from kitchen goods, jewelry, and electronics clothes to hardware
Tiffany & Co. is a specialty retail store that sells luxury merchandise. The company is a part of the consumer discretionary sector and belongs to the specialty store sub-industry. Various well known companies such as Bed Bath & Beyond, AutoZone and Staples belong to the specialty store sub-industry. Shopping malls are the primary location of the specialty retail stores. Although some stores are individually located in plazas, most specialty retailers choose malls in order to attract more potential customers and explore other benefits such as shared security and parking costs which can be essential to their overall.1
The third determinant of the diamond – related and supporting industries looks at the industry suppliers and...
Wholesalers acts as a lesion between manufacturers of commodities and other industries that are interesting in selling the same products. Along this distribution chain wholesalers usually purchase goods in large quantities and in turn sells them to retailers who ultimately supplies goods and services to consumers. Due to the available space at wholesale locations they are able to store products for distribution to retailers which reduces retailers storage costs. Wholesalers are able to store goods in large quantities which allow retailers to purchase in small quantities. Due to this option retailers are able to only purchase what is needed at that given point (Kotler & Keller, 2012). Additionally, because wholesalers are able to purchase goods