U.S. Fourth Quarter 2020 Specialty Jewelers' StrongMarch 29, 21
IDEX Research estimates that U.S. Specialty Jewelers generated sales of about $13.1 billion USD, a 17 percent sales increase, during the fourth calendar quarter - October, November, December of 2020 - when compared to the same three-month period a year earlier.
Specialty Jewelers' sales gain of 17 percent (red bar) outpaced the overall fine jewelry and watch sales gain of nearly 14 percent (blue bar) in the U.S. market in the fourth quarter of 2020, as the graph below illustrates.
While Specialty Jewelers' fourth quarter 2020 sales gain was solid, it is against easy comparisons in the prior year (4Q 2019) when Specialty Jewelers posted a modest 2.7 percent sales increase for the October-November-December 2019 period (versus 2018). Specialty Jewelers' weak sales gain in the final quarter of 2019 (a pre-pandemic period) compared unfavorably to the total jewelry and watch industry sales gain of 3.6 percent for the same three-month period ending December 2019.
U.S. Specialty Jewelers' sales results have been volatile - and difficult to estimate - during 2020 due to a variety of factors, including the following:
• The U.S. Department of Commerce has ceased publishing sales estimates for Specialty Jewelers during the pandemic due to an insufficient sample size. We're unsure if the Department of Commerce will ever have a reliable, credible sample to report Specialty Jewelers' sales.
• As a result of industry consolidation over the past two decades, far fewer Specialty Jewelers are reporting their sales publicly. Other than Signet Group, there is no large publicly held jeweler who is regularly reporting store-based sales trends in the U.S. market. Movado reports store sales for its watches, but it is a small number - about $59 million in 2020. Tiffany's acquisition by LVMH took place in early 2021, so it is no longer a proxy for luxury jewelry sales trends in the U.S. market.
o Signet's fourth fiscal quarter (Nov-Dec-Jan) sales Â¬- stores and online - in its North American retail network (U.S. and Canada) rose by 10.4 percent; online sales rose by a dramatic 66.0 percent, while bricks-and-mortar same-store sales edged higher by 0.6 percent. This was the second consecutive quarter of same-store sales growth in all of Signet's U.S. branded stores.
o Movado's company stores posted a 24.4 percent sales decline - both total sales and same-store sales - in the fourth fiscal quarter (Nov-Dec-Jan). The company had 45 U.S. stores and 2 Canadian stores in both years.
• Small Specialty Jewelry chains have been reluctant to respond to Department of Commerce sales queries; rather, those chains and independent merchants have been struggling to rebuild their post-pandemic business.
• Different states and regions of the country have had various - and ever-changing - regulations regarding the ability of retailers to remain open during the pandemic. Therefore, sales results show no broad patterns regionally or nationally.
• Monthly sales results for Specialty Jewelers have been inconsistent. Hence, we have opted to publish our sales estimates for the fourth quarter in total, rather than by individual month. We estimate that Specialty Jewelers' sales strengthened during the quarter: December sales gains were the strongest of any month during 2020, based on the results of jewelers in our proprietary sample.
• Pent-up demand for jewelry is making it difficult to obtain reliable sales data. When one region of the country opens up, jewelry sales typically surge. In other areas which remain relatively closed, shoppers have remained home and jewelers' store hours are reduced.
IDEX Research's proprietary sample of Specialty Jewelers have reported sales levels from "no sales" to "soaring double-digit gains." This makes it difficult to accurately estimate Specialty Jewelry sales, which represent about 35 percent of U.S. fine jewelry and watch sales in the fourth calendar quarter.
Specialty Jewelers' Estimated Annual Sales Weak
IDEX Research estimates that U.S. Specialty Jewelers' sales were $28.6 billion for the year 2020, down just over 11 percent from 2019. All of this weakness came during the first half of 2020; jewelry demand recovered solidly in the second half of 2020.
Total U.S. sales of fine jewelry and watches rose marginally by 0.6 percent in 2020 to an estimated $77.2 billion versus the prior year's $76.8 billion. This is a preliminary estimate by the Department of Commerce; we believe it will likely be revised downward when final data becomes available.
The graph below illustrates preliminary estimated full-year 2020 sales comparisons for total U.S. fine jewelry and watch (blue bar) versus sales results of Specialty Jewelers (red bar). The comparisons are based on 12 months' results for 2020 versus 2019.