How A Post-Pandemic Return To Travel & Entertainment Is Impacting Consumer Diamond Demand

Jan 12, 2023
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แหล่งที่มา: https://gjepc.org/solitaire
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In December, Signet Jewelers, the largest diamond retailer in North America, said its same-store-sales fell by almost 8% year-over-year in the company’s most recently concluded fiscal quarter which ended 31st October.


Management attributed the results in part to a “consumer behavior shift,” implying a softening of customer sentiment due to the current macroeconomic backdrop but also a consumer transition back to more “experience” discretionary spending – as the Western world has emerged from pandemic related restrictions over the last two years.


Global diamond jewellery sales grew to almost $90 billion in 2021 according to Paul Zimnisky estimates, as confident consumers (boosted by economic stimulus) looking to give meaningful gifts bought diamonds. This situation was enhanced by the unavailability of traditionally competing experiential consumer options such as travel and entertainment.


Earlier this year, Signet management did caution that some consumer discretionary spending could move away from the jewellery category “reflecting pent-up demand for experience-oriented categories.”


The pandemic also brought about a multi-decade boost in marriage engagements which peaked in 2021. This drove bridal diamond jewellery sales to record highs. Although the momentum has since begun to normalise in recent quarters.1


Consequently, in August, Signet cut full year sales guidance to $7.6-7.7 billion, a 6% cut, implying a year-over-year sales decline of about 2% for the fiscal year ending January 2023.2


That said, the company’s comparable sales this year are still on pace to be 25%-plus higher than pre-pandemic levels – an indication that the company, and the larger industry, has maintained an impressive amount of the ground it has gained over the last two years.


While the West spent 2022 emerging from the pandemic, jewellers in Greater China are still dealing with severe disruptions as the Chinese government has maintained a strict “Zero-Covid” policy into this year.


In March, the major Chinese city of Shenzhen was partially locked down after a new Covid-19 outbreak. While measures in Shenzhen were eased just a few weeks later, subsequent lock-downs in other important metro areas, including parts of Shanghai and the city of Jilin in north-east China, followed. Then, in September, Chengdu, a city of over 20 million people and the capital of China’s Sichuan province, was “fully” locked-down.


Other major cities in China including Xian and Guiyang have also been locked down this year.


The measures have negatively impacted the entirety of the Chinese economy – and this year, jewellery as a category in China has not outperformed as it did during 2020 and 2021.


In the six months ended September, Greater China major, Chow Tai Fook’s same-store-sales fell 8%.3 In late-November, management said that the trend has continued post-period end.


LVMH, the world’s largest luxury conglomerate said in October that customer traffic in Mainland China is “still nowhere near 2019 levels.” LVMH operates notable jewellers including Tiffany & Co. and Bulgari. In recent years, China has represented upwards of 30% of LVMH’s global sales across categories.


Looking ahead, speaking to the impact of the 2022 lockdowns on its business, Chinese jeweller Luk Fook noted that it still expects to achieve “double-digit” revenue growth in the current fiscal year ending March 2023 and “record high profit” in three years’ time due to “the progressive relaxation of the lockdown measures in the Mainland” as well as “the government’s commitment to implementing economic push measures and consumption encouragement policies” – referring to the Chinese government’s “Dual Circulation Strategy” and “14th Five-Year Plan.”


The former is a Chinese economic policy that was implemented in early-2020 aimed at stimulating domestic consumption while remaining open to international trade and foreign investment. The latter is the latest in a series of social and economic development initiatives first implemented by the government in 1953.


The U.S. is estimated to represent approximately 50% of global diamond jewellery demand. China is estimated to be approaching 20% of global demand.

ข้อมูลอ้างอิง


https://gjepc.org/solitaire/how-a-post-pandemic-return-to-travel-entertainment-is-impacting-consumer-diamond-demand/

ความคิดเห็น


How A Post-Pandemic Return To Travel & Entertainment Is Impacting Consumer Diamond Demand

Jan 12, 2023
36 views
0 share
แหล่งที่มา: https://gjepc.org/solitaire
หมวดหมู่: การตลาด

In December, Signet Jewelers, the largest diamond retailer in North America, said its same-store-sales fell by almost 8% year-over-year in the company’s most recently concluded fiscal quarter which ended 31st October.


Management attributed the results in part to a “consumer behavior shift,” implying a softening of customer sentiment due to the current macroeconomic backdrop but also a consumer transition back to more “experience” discretionary spending – as the Western world has emerged from pandemic related restrictions over the last two years.


Global diamond jewellery sales grew to almost $90 billion in 2021 according to Paul Zimnisky estimates, as confident consumers (boosted by economic stimulus) looking to give meaningful gifts bought diamonds. This situation was enhanced by the unavailability of traditionally competing experiential consumer options such as travel and entertainment.


Earlier this year, Signet management did caution that some consumer discretionary spending could move away from the jewellery category “reflecting pent-up demand for experience-oriented categories.”


The pandemic also brought about a multi-decade boost in marriage engagements which peaked in 2021. This drove bridal diamond jewellery sales to record highs. Although the momentum has since begun to normalise in recent quarters.1


Consequently, in August, Signet cut full year sales guidance to $7.6-7.7 billion, a 6% cut, implying a year-over-year sales decline of about 2% for the fiscal year ending January 2023.2


That said, the company’s comparable sales this year are still on pace to be 25%-plus higher than pre-pandemic levels – an indication that the company, and the larger industry, has maintained an impressive amount of the ground it has gained over the last two years.


While the West spent 2022 emerging from the pandemic, jewellers in Greater China are still dealing with severe disruptions as the Chinese government has maintained a strict “Zero-Covid” policy into this year.


In March, the major Chinese city of Shenzhen was partially locked down after a new Covid-19 outbreak. While measures in Shenzhen were eased just a few weeks later, subsequent lock-downs in other important metro areas, including parts of Shanghai and the city of Jilin in north-east China, followed. Then, in September, Chengdu, a city of over 20 million people and the capital of China’s Sichuan province, was “fully” locked-down.


Other major cities in China including Xian and Guiyang have also been locked down this year.


The measures have negatively impacted the entirety of the Chinese economy – and this year, jewellery as a category in China has not outperformed as it did during 2020 and 2021.


In the six months ended September, Greater China major, Chow Tai Fook’s same-store-sales fell 8%.3 In late-November, management said that the trend has continued post-period end.


LVMH, the world’s largest luxury conglomerate said in October that customer traffic in Mainland China is “still nowhere near 2019 levels.” LVMH operates notable jewellers including Tiffany & Co. and Bulgari. In recent years, China has represented upwards of 30% of LVMH’s global sales across categories.


Looking ahead, speaking to the impact of the 2022 lockdowns on its business, Chinese jeweller Luk Fook noted that it still expects to achieve “double-digit” revenue growth in the current fiscal year ending March 2023 and “record high profit” in three years’ time due to “the progressive relaxation of the lockdown measures in the Mainland” as well as “the government’s commitment to implementing economic push measures and consumption encouragement policies” – referring to the Chinese government’s “Dual Circulation Strategy” and “14th Five-Year Plan.”


The former is a Chinese economic policy that was implemented in early-2020 aimed at stimulating domestic consumption while remaining open to international trade and foreign investment. The latter is the latest in a series of social and economic development initiatives first implemented by the government in 1953.


The U.S. is estimated to represent approximately 50% of global diamond jewellery demand. China is estimated to be approaching 20% of global demand.

ข้อมูลอ้างอิง


https://gjepc.org/solitaire/how-a-post-pandemic-return-to-travel-entertainment-is-impacting-consumer-diamond-demand/

ความคิดเห็น


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