Jewelers of America are now in the process of seeking participants in its annual Cost of Doing Business Report for Retail Jewelers. JA has been running this important project for as long as I can remember. Except for a two-year hiatus in 2011 and 2012, JA has collected and published the report for the benefit of the retail jewelry community. Members of the manufacturing, wholesale and publishing firms also benefit from the information contained in the report because it provides a snapshot of the actual operating results of retail jewelers. The report presents information on five separate segments of retail:
• High profit firms
• High-end firms
• Mid-range firms
• Jewelry Chains (with 3 or more stores)
The Cost of Doing Business Report is a detailed analysis of key operating statistics that every jeweler can and should use to compare their individual performance results. Measuring results of any business is the responsibility of the owners and it goes to the basic question of “How are we doing?” Measuring results tells them where they are at a particular moment in time. While you may recall the old joke about accountants are those who try to tell the driver where to go by looking out the rear view window. The fact is though, unless you know where you are right now, you cannot realistically determine where you should be going and what specific steps you need to take to get there! And to do that, you must drill down into the details of the business.
Looking at last year’s report there is much to consider. Frankly, there is much that is concerning about the state of the retail jewelry business. This is especially the case if, as I suspect, the results are typical and projectable to the rest of the retail community. Actually, I think is entirely likely that the results are projectable and are probably worse, because those who did participate demonstrated they are interested in the information and how they compare. Those who did not participate are likely not interested and my guess is their performance numbers would be lower than those presented in the report.
Some of the specific areas presented in the report include strategic profit model ratios to look at including:
• Profit margins by store/business type
• Asset Turnover
• Return on Investment
• Return on New Worth (Owners on Equity)
• Details on Operating Expenses
• Inventory Turnover
• Sales per square foot and gross
• Gross profit per square foot
• Sales and gross margin per employee
• Payroll by employee
Each of these analyses is categorized by store volume size or appropriate category, making it very easy for an individual retailer to plug in their own numbers.
Even better is the fact that for this year, JA offers retailers who participate in the data collection phase and complete the survey receive a valuable customized Performance Analysis Report with comprehensive comparisons of the jeweler’s financial data against industry averages to help identify how to improve store performance and profits. They also receive a free copy of the final report.
Last bur not least, those retailers who do participate will be entered into four weekly drawings where a $500 cash prize is offered.
JA is asks retail jewelers to visit www.profitplanninggroup.com/jewel, to participate on or after April 12, 2014. The survey will be open through May 12.
Today, we live in an information society. This JA program is an excellent opportunity for y to both contribute to the industry’s stock of knowledge about itself as well as gain very valuable analysis of your own store. Mark your calendar for April 12th and log on. With your federal tax return completed you will have all of the information right at hand!
Clearly, the results will tell you how your store is doing and provide concrete ideas of how you will be able to improve its performance.