IDEX Online Research: Mid-Size Specialty Jewelers Are Most Productive
November 20, 11(IDEX Online) –
Newly released data from the Census Bureau’s Economic Census shows the mid-size specialty jewelers out-produce both small and large specialty by a wide margin, based on sales and revenue generation.
Bigger Is Not Always Better
What’s the lesson here? Bigger isn’t always better.
Why do mid-size specialty jewelers generate greater sales productivity than other larger or smaller jewelers? Most of these jewelers are higher-end jewelers. Therefore, their average transaction value is higher. Further, high-end stores generally have fewer stores in their chain, opting to boost per-store sales as their strategy for profitability.
Unfortunately, the Census Bureau’s Economic Census did not address the profitability of those high-revenue mid-size specialty jewelers. However, we believe that it’s a safe bet that they are also the most profitable.
The table below summarizes the productivity characteristics of mid-size specialty jewelers versus smaller and larger stores.
The sales productivity of mid-size stores is greater in every category on the table with one exception: sales per employee for firms with 25-49 stores. However, it is well in excess of the firms with 50 or more stores (larger chains), and it is a close second to the smaller specialty firms. Otherwise, mid-size stores significantly out-perform larger and smaller specialty jewelry stores.
Source: Census Bureau |
Mid-Size Chains More Productive
Multi-store chains trounce the productivity of single-store operators on virtually every key financial metric.
However, among multi-store operators, the smaller chains are generally more productive than the larger chains.
The graph below illustrates the per-store sales by size of chain for specialty jewelers. Clearly, the smaller chains tend to out-perform the larger chains on this important productivity measure.
Source: Census Bureau |
In terms of sales per employee, it is even more evident that smaller chains out-perform larger chains, as the graph below illustrates.
Source: Census Bureau |
Sales Per Store Productivity
Sales per store continues to rise as the firms get larger, but peak at just over $4 million per store for firms with annual revenues between $50 million and $100 million. After that level, the sales per store falls back to just above the industry average.
With the exception of Tiffany, most high-end specialty jewelry firms operate with fewer stores than the mass-market jewelers, but those high-end stores are highly productive. The average transaction value ($1,000-$2,000) of high-end stores is usually several times as large as a mass-market average transaction value ($300-400). Thus, the sales per store of those high-end jewelers is significantly higher than the industry average.
The graph below illustrates sales per store based on the firm’s annual revenue level. A firm may operate several stores.
Source: Census Bureau |
Sales Productivity Based on Employees Per Store
Specialty jewelry firms with 20 to 250 employees – which represent just 3 percent of the total firms in the industry – generate greater sales per store and greater sales per establishment than any other size firm, with either more employees or fewer employees.
The graph below summarizes sales per employee and sales per store by employment size of the total firm, which may have multiple stores.
Source: Census Bureau |