Christie’s Enters the Contemporary Jewelry Market with 7 Curated Jewels For Online Sale

Opal and Diamond Starburst Ring by Maiyet Fine Jewelry set with a circular cabochon opal within a rose-cut diamond and 18k gold starburst mount. $42,500

Christie’s auction house has added to its online offerings with seven jewels created by four contemporary jewelry designers.

The one-of-kind pieces were curated by Dalia Oberlander, founder & CEO of Latest Revival, a luxury jewelry website, and sold exclusively on Christie’s e-commerce site, www.Christies.com/OnlineOnly.

Fossilized Dinosaur Bone and Diamond Ring By Monique Péan set with an irregularly shaped black fossilized dinosaur bone, within a micro pavé-set circular-cut diamond and 18k white gold mount. $31,640

The creations by contemporary jewelry designers, CompletedWorks, Maiyet, Monique Péan, and Pamela Love, range in cost from $3,000 - $132,680. The sale began Wednesday.

Oberlander, said she wanted the collection to have a broad representation of the contemporary jewelry available.

Marble and Diamond Ring by Completedworks set with column-shaped Breccia di Massa marble, surrounded by a circular-cut diamond and 18k gold vine motif, mounted in 18k gold. $15,000

“I wanted to feature a mix of designers with established presence as well as younger designers,” she said. “Each of them are innovators in their field, whether they are working with unusual materials or introducing unique designs to the marketplace.”

John Auerbach, Christie’s International managing director, eCommerce, said the collection of custom pieces offers its clients a “compelling” reason to shop online.

Diamond Earrings by Deborah Pagani designed as a baguette-cut diamond openwork chandelier set with circular-cut diamonds and black diamond detail, suspended from a similarly-set top, mounted in 18k white gold. $19,360

“We’re always looking to offer clients access to the best and most exquisite property,” he said. “Latest Revival’s relationships with contemporary jewelry designers allowed us to curate a truly unique assortment of custom pieces.”

Oberlander added, “It's the perfect moment for a cohesive showcase of estate and contemporary jewels worn in unison.”

Diamond Necklace by Monique Péan, the open collar designed as a cascade of pear-shaped rose-cut diamonds, mounted in 18k white gold. $132,680

Highlights from the seven piece collection include an 18k gold ring by CompletedWorks that features a column-shaped Breccia di Massa marble surrounded by a circular cut diamond and 18k gold vine motif; a ring set with an irregularly shaped black fossilized dinosaur bone within a micro pavé-set circular-cut diamond and 18k white gold mount by Monique Péan; and 18k white gold baguette-cut diamond openwork chandelier earrings by Deborah Pagani.

The most expensive piece is an 18k recycled white gold necklace in an open-collar design, also by Monique Péan, featuring a cascade of 24.06 carats in pear-shaped rose-cut diamonds. It’s priced at $132,680.

Opal, Diamond and 10k Gold 'Frida' Earrings by Pamela Love designed as a circular opal stud, with an earring back jacket suspending three 10k gold feathers set with circular-cut diamonds, mounted in 10k gold. $3,000

Each item will include a signed sketch from the designer.

Auerbach said clients in New York who wish to view the jewels can make an appointment with a Christie’s eCommerce specialist for a private showing.

Diamond and Platinum Ring by Monique Péan set with a marquise-cut diamond within a micro pavé-set circular-cut diamond surround, to the micro pavé-set circular-cut diamond hoop, mounted in platinum. $36,060

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Christie’s To Hold Inaugural Online-Only Jewelry Auction Beginning Wednesday

Amethyst, diamond and gold necklace by Lily Gabriella. Estimate:
$3,500 – $4,500

“Summer Jewels," is the name of Christie’s first ever online-only sale of jewelry. It will include 100 lots of price accessible pieces from contemporary designers that include Lily Gabriella Elia and Olivia Wildenstein and the venerable names such as Marina B, Roberto Coin and Salavetti. The sale will open for bidding on Wednesday and run through July 26. It is accessible through www.christies.com/summerjewels. 

This isn’t the international auction house’s first foray into e-commerce for jewelry. It has included online bidding for some time during its regular auction, which operates in a similar way as phone bidding. The monumental Elizabeth Taylor auction in December 2011 had an online-only auction component that included jewelry for the record-breaking sale. 

Sapphire cufflinks by Trianon. Estimate: $3,000 – $3,500

Highlights of the upcoming jewelry sale include items from Brazilian born designer Lily Gabriella Elia and her namesake Lily Gabriella collection such as a diamond pendant necklace (estimate: $4,000 – $5,000), an 18K white gold and diamond ring inspired by Elia’s South American heritage (estimate: $2,800 – $3,800) and an amethyst, diamond and gold necklace (estimate: $3,500 – $4,500).

Keemee designer Olivia Wildenstein creations are comprised of rounded and organic jewels worked in 18K gold, diamonds and cultured pearls. Top items include a citrine and diamond ‘Bonbon’ ring (estimate: $1,000 – $1,500), a garnet and diamond ‘Bonbon’ ring (estimate: $1,000 – $1,500), and a pair of cultured pearl and diamond “Coeurs Enlacés” ear pendants (estimate: $6,000 – $8,000).

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Blue Nile Q1 Sales Up 16.9%, Profit Exceeds $800,000

The year has begun well for Blue Nile, Inc. The online diamond and jewelry retailer said Thursday that net sales increased 16.9 percent to $97.1 million for the first quarter ended March 31, led by a near 20-percent increase in U.S. engagement jewelry sales and overall strong growth in all markets.

Net income totaled $832,000, or $0.07 per diluted share, compared with $154,000 in the first quarter of 2012. Operating income for the period totaled $1.2 million, representing an operating margin of 1.2 percent of net sales.

Non-GAAP adjusted EBITDA for the quarter totaled $3.1 million. For the trailing 12-month period ended March 31, net cash provided by operating activities totaled $21.3 million compared to $18.4 million for the same period of the prior year. For the same trailing 12-month period, non-GAAP free cash flow totaled $18.6 million.

“We are pleased to announce significant revenue growth along with expanding profitability in the first quarter of 2013,” said Harvey Kanter, Blue Nile president and CEO. “Clearly our value proposition continues to resonate with consumers, both in the U.S. and internationally.”

Other first quarter 2013 highlights for the Seattle-based company include:

* U.S. engagement net sales increased 19 percent to $55.3 million.

* U.S. non-engagement net sales increased 7.4 percent to $24.2 million.

* International net sales increase of 24.8 percent to $17.6 million. Excluding the impact from foreign exchange rates, international net sales increased 25.9 percent.

* Gross profit totaled $17.6 million. As a percent of net sales, gross profit was 18.2 percent compared to 18.4 percent for the first quarter of 2012.

* Selling, general and administrative expenses for the first quarter 2013 were $16.5 million, compared to $15.1 million in the first quarter of 2012. This includes stock-based compensation expense of $1.1 million for the first quarter of 2013 and 2012.

* Earnings per diluted share for the first the period included stock based compensation expense of $0.05 compared to $0.05 for the first quarter of 2012.

* Cash and cash equivalents totaled $40.5 million.

In its guidance Blue Nile said it expects net sales in the second quarter to be between $100 million and $105 million with earnings per diluted share are projected at $0.13 to $0.17.

The company also said that net sales for fiscal year 2013 (ending December 29) are expected to be between $440 million and $470 million with earnings per diluted share projected at $0.75 to $0.85.

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Another Wave of Innovation From Outside the Jewelry Industry with Consumer-Friendly Websites

The jewelry industry has an image problem. Younger consumers find the jewelry store environment intimidating. More importantly, these same consumers, who spend much of their time with digital media, find websites from retailers, designers and manufacturers equally imposing.

Innovation online has largely come from outside the industry, such as website Blue Nile. However, the Blue Nile model with its focus on jewelry and diamonds as a commodity seems to be losing ground as the digital landscape has again dramatically changed with the wide acceptance of social and mobile media.

To address this new reality, two websites (again founded by people outside the industry) have launched that are working to bridge the gap among e-commerce, social media and bricks-and-mortar retail: Adornia and Stone & Strand.

These well-branded projects have a lot in common. They are focused on delivering a quality experience by attempting to build a community of enthusiastic and engaged jewelry buyers. They both are using a curated approach to their business models. The founders of both sites are products of the Wharton School of the University of Pennsylvania. In addition, these founders also have a wealth of professional and personal experiences that have enhanced the vision of their projects.

Adornia co-founders Becca Aronson and Moran Amir met at Wharton and didn’t wait to leave the business school before starting their own company. Both are scheduled to graduate in May but launched Adornia in September 2012 out of their apartments. They plan to return to New York to set up a permanent home for their business. Aronson was the former Lucky accessories editor and Amir handled retail operations for Catherine Malandrino and Diesel. Their experiences are complementary with Aronson the creative person while Aronson handles much of the business. “She’s Photoshop and I’m PowerPoint,” Amir says.

The website sells affordable fine fashion jewelry at a price range from approximately $75 to $2,300. Their customer is very specific: fashion-forward, professional, urban women from the ages of 25 to 45 who have a strong sense of personal style. This site’s main customers are women who buy their own jewelry (the self-purchasing woman).

Aronson and Amir purchase all of the jewelry themselves. In addition to curating the pieces, they organize them in separate collections with names like “Heavy Metal,” “Deco After Dark” and “Darkest Jungle.” The idea is to make personal jewelry shopping easier for women who know their own style. While the site is geared for women, they say that this presentation also makes it easier for men and friends to purchase gifts. They also discuss fashion trends through their blog, “The United States of Adornia.”

The co-founders take their brand to the people, holding trunk shows from San Francisco to Shanghai, China. One of their plans is to do a cross country bus tour.

Meanwhile, Wharton grad Nadine McCarthy Kahane launched her website, Stone & Strand, April 18. A former strategy consultant, she has traveled extensively for work and pleasure and has lived in Singapore, London and Buenos Aires before settling in New York.

Instead of curating the jewelry collection like Adornia, Kahane is curating a group of jewelry designers. She opened the site with a group of 24 designers. The result is a broad jewelry collection that ranges in material from wood to high-karat gold and in price from $115 to well over $20,000. For now all of the designers reside in the U.S. (although several are from other countries) but Kahane said she will expand to include designers from around the world.

This is a site geared toward a clientele who love the search for original adornment almost as much as they love wearing the pieces. “People want things they can fall in love with,” Kahane says. It’s really nice to be able to tap into that passion.”

On this website, the focus is totally on designers. Their works and their stories are presented front and center. They provide access to designers’ studios through personal meetings and special events.

For Kahane the inspiration to start this site was personal. First, she discussed the difficulties of learning about jewelry on her own (such as style, materials and cost). Then she said she has two friends who are jewelry designers who were having difficulty finding an online home for their work.

“We in business are trained to spot opportunities and we feel jewelry is going through this transformation,” she said. “It’s been so conservative. A lot of the designers don’t sell online or they sell a very small portion of their collection online. We do see things changing quickly. We see people buying off Instagram these days. It’s all about access.”

Another thing both sites share is free shipping to U.S. and customer-friendly return policies. Of course both brands appear on all of the standard social media platforms.

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Blue Nile Q4 Net Sales Up 21%

Blue Nile said Tuesday that net sales increased 21.2 percent to $136.1 million for the fourth quarter, led by a 30 percent increase in bridal jewelry sales. Operating income for the period, ended December 30, 2012, totaled $7.1 million, representing an operating margin of 5.2 percent of net sales. Net income totaled $4.9 million, or $0.39 per diluted share. Non-GAAP adjusted EBITDA for the quarter totaled $9.1 million.

For the full year, the online diamond and fine jewelry retailer reported that net sales increased by 14.9 percent to $400 million. Operating income for the full year was $12.3 million, compared to $16.9 million in the prior year. Net income for the year was $8.4 million and earnings per diluted share totaled $0.63. Non-GAAP adjusted EBITDA for 2012 was $20.6 million.

Harvey Kanter, Blue Nile president and CEO of the Seattle-based company, noted that non-engagement jewelry sales for the holidays did not meet expectations but growth for the fourth quarter was still greater than 5 percent.

Net cash provided by operating activities totaled $34.4 million for the year compared to $15.4 million for the prior year. Non-GAAP free cash flow for the year was $31.9 million compared to $10.1 million for the prior year.

In its outlook, Blue Nile said it expects net sales to be between $94 million and $100 million with earnings per diluted share projected at $0.05 to $0.08. For the 2013 fiscal it expects net sales to be between $440 million and $470 million and earnings per diluted share are projected at $0.75 to $0.85.

"The fourth quarter caps off a great year of growth at Blue Nile, building upon our sequential growth while posting greater profitability versus the prior year. Investments we made in 2012 paid off with the highest annual levels of revenue growth and customer acquisition in five years, exceptional strength in engagement sales in the U.S., and a return to strong growth internationally,” said Harvey Kanter, Blue Nile president and CEO. “While we fell short of our expected sales of non-engagement jewelry during the holiday season, in part due to a weaker environment for consumer discretionary spending, we gained valuable insight that will guide the evolution of our product mix. We believe that our strategy to accelerate this part of our business is on track."

The company also announced it has entered into an agreement with U.S. Bank National Association for borrowing under a $35 million revolving credit facility maturing in 2014.

Among the highlights:

* U.S. engagement net sales for the fourth quarter 2012 increased 31 percent to $73.6 million. U.S. engagement net sales for the full year 2012 increased 21.7 percent to $226.6 million.

* U.S. non-engagement net sales for the fourth quarter 2012 increased 5.3 percent to $42.5 million. U.S. non-engagement net sales for the full year 2012 increased 4.9 percent to $111 million.
    
* International net sales for the fourth quarter 2012 increased 26.8 percent to $20 million. International net sales for the full year 2012 increased 11.7 percent to $62.4 million. Excluding the impact from changes in foreign exchange rates, international net sales increased 12.6 percent for the fiscal year.
    
* Gross profit for the fourth quarter totaled $25.7 million. As a percent of net sales, gross profit was 18.8 percent compared to 20.7 percent for the fourth quarter of 2011. Gross profit for the year totaled $75.1 million.
    
    New customers, which are defined as individuals who have not made a prior purchase from Blue Nile, grew 7.8 percent in the fourth quarter of 2012 compared to the fourth quarter of 2011. For the full year, new customers grew 17.6 percent compared to the full year of 2011.
    
* Selling, general and administrative expenses for the fourth quarter were $18.6 million, compared to $16.9 million in the fourth quarter of 2011. Selling, general and administrative expenses for the full year were $62.8 million, compared to $55.2 million for the full year 2011.
    
* Earnings per diluted share for the fourth quarter included stock-based compensation expense of $0.06 for the fourth quarter of 2012 and 2011.
    
* Cash and cash equivalents at the end of the fiscal year totaled $87 million, compared to $89.4 million at the end of the fiscal year 2011.

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Consumers Online Spending Up 15% in Q3

Online retail spending for the third quarter increased 15 percent year-over-year to $41.9 billion, representing the 12th consecutive quarter of positive year-over-year growth and eighth consecutive quarter of double-digit growth, according to comScore, Inc.

Gian Fulgoni, chairman of the Reston, Va.-based company that specializes in measuring digital data, said the numbers are consistent with the prior quarter and confirm “the strength in the e-commerce sector, despite a few negative headwinds in the macroeconomic environment during the quarter. Such performance offers some optimism as we approach the holiday season, especially given recent improvements in consumer sentiment.”

He added, “With the housing market beginning to show signs of recovery in addition to increasing–if still underwhelming–job growth, there appears to be strong enough footing to support a very healthy online holiday shopping season.”

Other highlights from comScore’s Q3 2012 U.S. retail e-commerce sales estimates include:

* The top-performing online product categories, according to the survey were: Digital Content & Subscriptions, Consumer Electronics, Event Tickets, Apparel & Accessories, and Computer Software. Each category grew at least 16 percent year-over-year.

* About 37 percent of U.S. consumers say they have engaged in “showrooming” behavior where they use a smartphone while in a retail store to check prices or to purchase a product online, representing a 5-percent increase in the past two quarters.

* According to the survey, 48 percent of U.S. consumers now rate the economy as “poor” an 8-percentage point improvement vs. the prior quarter and the most pronounced improvement since early 2009.


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Blue Nile Sales Up 19.8 Percent

Blue Nile said Thursday its net sales increased 19.8%, year-over-year, to $89.8 million for the third quarter due to a increases in all its product categories, including its new focus on fashion jewelry, and a large increase in new customers. However, international sales fell for the period ended September 30.

Operating income for the diamonds and jewelry Internet retailer totaled $2.7 million, representing an operating margin of 3 percent of net sales. Net income totaled $1.7 million, or $0.14 per diluted share. Non-GAAP adjusted EBITDA for the quarter totaled $4.8 million.

"We are excited to report solid results in the third quarter, with accelerating revenue growth and expanding earnings per share, said Harvey Kanter, president and CEO of the Seattle-based company. “The execution of our strategy is clearly on track. Investments we made in marketing and pricing are working and building momentum behind the strength of our diamond engagement products. Sales of our non-engagement products also improved this quarter, and we are only beginning to launch an assortment of new jewelry aimed to further accelerate our growth. With continued steady execution of our strategy coupled with exciting product offerings for the holiday season, we believe we are well positioned to achieve our goals for 2012.”

Among the highlights for the third quarter:

* U.S. engagement net sales increased 31.5 percent to $54.1 million.
    
* U.S. non-engagement net sales (a new focus for the company) increased 12 percent to $21.8 million.
    
* International net sales fell 3.3 percent to $14.4 million for the third quarter 2011. Excluding the impact from changes in foreign exchange rates, international net sales decreased 1.5 percent.
    
* Gross profit totaled $16.9 million. As a percent of net sales, gross profit was 18.8 percent compared to 19.8 percent for the third quarter of 2011.
    
* New customers grew 22.4 percent.  
    
* Selling, general and administrative expenses were $14.3 million, compared to $12 million in the third quarter of 2011.
    
* At the end of the third quarter, cash and cash equivalents totaled $30.2 million.

In its financial guidance, the company said it expects fourth quarter net sales to be between $140 million and $153 million, with earnings per diluted share are projected at $0.44 to $0.50.

For the fiscal year it expects net sales to be between $404 million and $417 million, with earnings per diluted share are projected at $0.70 to $0.75.

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Fabergé Takes to E-Commerce

The House of Fabergé, known since the 19th Century as one of the most exclusive jewelers on the planet, is broadening its reach and moving into the 21st Century by offering its collections on an e-commerce website.

The “online boutique” is set to launch on April 16 and is designed to complement Fabergé’s existing network of retail stores, the company said in a statement, promising that the site will have “a signature blend of refined sophistication and modernity.”

Each of the Fabergé high and fine jewelry collections—Les Saisons Russes, Les Fabuleuses, Les Fameux, Le Carnet de Bal, Solyanka and Les Favorites—will be represented by a hand-painted illustrations that captures “the artistry, romance and legend of Fabergé,” the company said.

The site also features an interactive area where customers can engage further with the world of Fabergé, experiencing social projects such as the Mir Fabergé art initiative, available also as an iPad application.

Purchases can be made in multiple currencies, with international delivery service to at least 29 countries. Customers can also share and store their favorite jewelry designs through multiple social media channels.

Blue Nile Names New CEO

Harvey Kanter

Online diamond and jewelry retailer, Blue Nile, has appointed retail industry veteran Harvey Kanter as CEO and president, effective March 30. He will also be appointed to the Seattle-based company’s board of directors. He replaces Diane Irvine who resigned suddenly in November.

Interim CEO, Vijay Talwar, has been named general manager and president of International, and will lead Blue Nile’s international business.

Kanter has more than 25 years of merchandising and retail experience, including multichannel retail and merchandising positions. Prior to joining Blue Nile, he served as president and CEO of Moosejaw Mountaineering and Backcountry Travel, Inc., a leading multichannel retailer of premium outdoor apparel and gear. Under his leadership, Kanter developed Moosejaw’s enhanced brand architecture and market positioning by clearly defining the merchandising, marketing, and consumer experience strategy and initiatives. During his tenure, Moosejaw experienced double-digit revenue growth and was the recipient of numerous industry awards, including: Internet Retailer Hot 100 and Hot 100 Mobile, and Ad Age Top 50 Marketing Company.

Before Moosejaw, Kanter served as executive VP and managing director of Michaels Stores, the nation’s largest craft store chain in the United States and Canada, with nearly $4 billion in annual sales. While at Michaels, Kanter led the overhaul of the company’s product merchandising and was responsible for product trend development.

“Harvey brings a vibrant leadership style and a unique ability to align product strategy and marketing in such a way that inspires consumers,” said Mark Vadon, Blue Nile chairman. “His dynamism and passion, coupled with his experience in online and traditional retail, are just what we need to drive growth and inspire the next generation of Blue Nile customers.”

Blue Nile Q4 Sales Down 2.1%

Online diamond and jewelry retailer, Blue Nile, Inc., said Wednesday that net sales for the fourth quarter decreased 2.1 percent, year-over-year, to $112.3 million due to a decline in high-end diamond sales and a rise in commodity prices.

Operating income for the quarter, ended January 1, was $6.3 million, compared to $9.2 million in the fourth quarter of 2010. Net income for the fourth quarter totaled $4.2 million. Non-GAAP adjusted EBITDA for the fourth quarter was $8.4 million, compared to $11.6 million for the fourth quarter last year.
For the full year, Blue Nile reported net sales increase of 4.5 percent to $348 million. Operating income for the full year was $16.9 million compared to $21.3 million in the prior year.

Net cash provided by operating activities totaled $15.4 million for the year. Non-GAAP free cash flow for the year was $10.1 million.

"The fourth quarter was challenging for Blue Nile, with weakness in demand from our high end diamond customers and some of our international markets, as well as the continued impact of inflationary pressure on commodity costs,” said Vijay Talwar, Blue Nile CEO.

Talwar added that the Seattle-based company began implementing parts of a new strategy to attract customers outside of its engagement core business.

“This strategy drove positive momentum, resulting in our strongest period of customer acquisition since 2007, with new customer growth of 15 percent, Talwar said. “Additionally, in the fourth quarter we achieved order growth of 22 percent and unit growth of 30 percent compared to the fourth quarter of 2010. Growth in all three of these metrics accelerated in December and we believe these trends are important indicators of the long term growth potential of our business.”

The company also announced it plans to repurchase up to $100 million of its common stock over 24 months.

In its outlook the company said it expects first quarter net sales to be between $81 million and $84 million and earnings per diluted share to be $0.04 to $0.07.

Net sales for the year are expected to be between $384 million and $417 million or $0.70 to $0.85 per diluted share.

Financial Highlights include:

* U.S. engagement net sales for the fourth quarter and full year 2011 were $56.2 million and $186.2 million, respectively, down from the fourth quarter and full year 2010, which were $59.8 million and $189.5 million, respectively.
    
* U.S. jewelry net sales for the fourth quarter and full year 2011 were $40.4 million and $105.9 million, respectively. U.S. jewelry net sales for the fourth quarter and full year 2010 were $39.7 million and $100.1 million, respectively.
     
* International net sales for the fourth quarter and full year 2011 were $15.7 million and $55.9 million respectively. International net sales for the fourth quarter and full year 2010 were $15.3 million and $43.3 million, respectively. Excluding the impact from changes in foreign exchange rates, international sales increased 23.3% for the fiscal year.
    
* In the fourth quarter, orders, which are defined as customer orders that have been shipped, grew 22 percent from the fourth quarter of 2010.
    
* New customers, which are defined as individuals who have not made a prior purchase from Blue Nile, grew 15 percent in the fourth quarter of 2011 compared to the fourth quarter of 2010.
    
* Gross profit for the quarter totaled $23.2 million. As a percent of net sales, gross profit was 20.7 percent compared to 22 percent for the fourth quarter of 2010. Gross profit for the year totaled $72.1 million.
    
* Selling, general and administrative expenses for the quarter were $16.9 million, compared to $16.1 million in the fourth quarter of 2010. The increase is primarily related to marketing to drive new customer acquisition and new personnel to support expansion of our product assortment and order growth. Selling, general and administrative expense for the quarter includes stock-based compensation expense of $1.2 million, compared to $1.6 million in the fourth quarter of the prior year.
    
* Net income per diluted share for the quarter includes stock-based compensation expense of $0.06, compared to $0.07 for the fourth quarter of 2010.
    
* Cash and cash equivalents at the end of the fiscal year totaled $89.4 million compared to $113.3 million at the end of fiscal year 2010. 
    
* Full year 2011 capital expenditures totaled $5.4 million compared to $1.8 million for the full year 2010.

Q4 Retail E-Commerce Spending Nears $50 Billion

Online retail spending for the fourth quarter of 2011 increased 14 percent, year-over-year, to $49.7 billion, according to comScore, which measures digital data. This growth rate represents the ninth consecutive quarter of positive year-over-year growth and fifth consecutive quarter of double-digit growth rates. For the entire 2011 year, U.S. retail e-commerce spending reached a record $161.5 billion, a 13-percent increase from 2010.

“The fourth quarter of 2011 capped off what was yet another strong year for online retail, one in which every quarter achieved double-digit increases versus the prior year,” said Gian Fulgoni, comScore chairman. “In the face of continuing uncertainty regarding the U.S. economy, consumers increasingly went online for their shopping needs. Price and convenience continue to be the critical value drivers for e-commerce, and unless those conditions change we can expect to see more channel-shifting to online in 2012 and perhaps even an acceleration in the current growth trend.”

Other highlights from Q4 2011 include:

* The top-performing online product categories were: Digital Content & Subscriptions, Jewelry & Watches, Consumer Electronics, Toys & Hobbies, and Computer Software. Each category grew at least 18 percent vs. year ago.

* Ten individual days in Q4 surpassed $1 billion in online spending, led by Cyber Monday (Nov. 28) at $1.25 billion. Monday, Dec. 5 ranked second at $1.17 billion, followed by Green Monday (Dec. 12) at $1.13 billion.

* 52 percent of e-commerce transactions included free shipping, representing an all-time high. The previous high was Q4 2010 at 49 percent.

* Smartphones and tablets played a growing role in online shopping, with consumes increasingly using smartphones to check prices and product features while physically in a retail store.

Royal Asscher and CoutureLab to Support the Seven Bar Foundation

This Shining Stars ring is among the Royal Asscher jewelry that will be available on CoutureLab. Photo credit: Royal Asscher

Royal Asscher said Thursday that it is selling jewelry from its Stars of Africa and Shining Stars collections on the website CoutureLab to benefit the Seven Bar Foundation.

CoutureLab is a luxury gift website that sells fine and rare products that focus on quality, heritage and craftsmanship. Seven Bar Foundation is a social enterprise that empowers women in the developing world by providing microfinance opprtunities that fuels local businesses that enrich communities.

A total of 20 percent of retail profit from sales of Royal Asscher jewelry on CoutureLab will benefit the Seven Bar Foundation and help extend ladders to women out of poverty.

Royal Asscher’s Stars of Africa and Shining Stars collections consist of diamonds encased within fluid-filled sapphire domes, which allow the diamonds to float freely like snowflakes in a snow globe. The result is cascading diamonds that emit light, fire and beauty. Each piece is handcrafted by expert craftsmen in Florence, Italy.

The idea behind the Stars of Africa and Shining Stars jewelry lines has always been to raise funds and awareness for children’s programs in Africa through its Star of Africa initiative. This is just another way for the company and priduct to achieve this goal, said. Renata Black, founder of the Seven Bar Foundation says, “We are honored to call the Royal Asscher.
 
In addition, Royal Asscher, founded in 1854 and known for cutting some of largest and most famous diamonds in history, fits right in with a website that focuses on heritage.

“Royal Asscher supports CoutureLab founder Carmen Busquets’ vision for her website as a place where the stories of the products and the people behind them would be celebrated—where clients could not only learn about the heritage and see the true value of it, but also fall in love and own a piece of it,” said Lita Asscher, president of Royal Asscher of America.

A Record-Setting Week for Online Holiday Sales

Online sales for the first full week of what is considered the true holiday shopping season grew 15 percent to a record $5.96 billion, according to comScore, a firm that measures digital data.

The week from November 28 (“Cyber Monday”) to December 2 had three individual days that saw more than $1 billion in online spending, led by Cyber Monday, which was the heaviest online spending day on record at $1.25 billion. November 29 reached $1.12 billion and November 30 reached $1.03 billion. These three billion dollar spending days currently rank as three of the four heaviest online spending days in history.

For the holiday season-to-date (November 1 – December 2 as measured by the Reston, Va.-based company), $18.7 billion has been spent online, a 15-percent increase versus the corresponding days last year.

“As the deals from this week expire, it will be important to see the degree to which consumers return to the same retailers to continue their holiday shopping, thereby helping improve retailers’ profit margins, or if we experience a pullback in consumer spending—which has occurred in previous years—before promotional offers and spending intensity pick back up in earnest around mid-December,” said comScore chairman Gian Fulgoni.

One of the most prevalent holiday season promotions used by online retailers is free shipping, which typically peaks around the Cyber Monday period. More than half of all transactions have included free shipping with rates increasing later into the season, comScore said. The week of Thanksgiving (week ending Nov. 27) saw free shipping occur on 64.4 percent of transactions, while this past week maintained a similar level at 63.2 percent. In each case, these rates were approximately 10 percentage points higher than last year.

“Free shipping is one of the most important incentives that online retailers must provide during the holiday season to ensure that shoppers will convert into buyers,” Fulgoni said.

More than one-third of respondents (36 percent) indicated that free shipping was “very important” and that they would not make a purchase without it, according to comScore’s annual holiday shopping survey. An additional 42 percent said that free shipping was “somewhat important” and that they actively seek out free shipping deals. Only 15 percent of respondents indicated that free shipping was not particularly influential in their purchase decision.

Cyber Monday is a marketing term created in 2005 by online retailers after learning that online shopping activity increased the Monday following Black Friday.

Black Friday Online Sales Total $816 Million, Cyber Monday Next

Black Friday saw $816 million in online sales, making it the heaviest online spending day to date in 2011 and representing a 26-percent increase versus Black Friday 2010, according to ComScore, a firm that measures digital data. Thanksgiving Day (November 24), while traditionally a lighter day for online holiday spending, achieved a strong 18-percent increase to $479 million.

Overall U.S. retail e-commerce spending for the first 25 days of the November – December 2011 holiday season, totaled $12.7 billion, a 15-percent increase versus the corresponding days last year.

“Despite some analysts’ predictions that the flurry of brick-and-mortar retailers opening their doors early for Black Friday would pull dollars from online retail, we still saw a banner day for e-commerce,” said comScore chairman, Gian Fulgoni. “With brick-and-mortar retail also reporting strong gains on Black Friday, it’s clear that the heavy promotional activity had a positive impact on both channels.

Now the attention turns to Cyber Monday (tomorrow), a marketing term created in 2005 by online retailers after learning that online shopping activity increased the Monday following Black Friday. ComScore says 80 percent of retailers are having special online promotions that day. Last year sales exceeded $1 billion and it expects to see that figure shattered.

As the online channel increasingly influences offline-shopping behavior, consumers turned to Black Friday sites on the web to conduct research in advance of the day’s events, the Reston, Va.-based firm said. Bfads.net led the pack with 3.9 million unique visitors from November 21 to 25, up 51 percent versus last year, comScore said.

Fifty million Americans visited online retail sites on Black Friday, representing an increase of 35 percent versus year ago, comScore said. Each of the top five retail sites achieved double-digit gains in visitors vs. last year, led by Amazon. Walmart ranked second, followed by Best Buy, Target and Apple.

“It is telling that the top multi-channel retailers also showed strong growth in visitors, demonstrating the importance of the online channel to the retail industry as a whole,” Fulgoni said.

Jewelry and Watches a Top e-Commerce Performer

Jewelry and Watches is one of several product categories that grew at least 15 percent in sales, compared to a year ago, according to comScore, Inc., a digital measurement and analytical firm.

The Reston, Va.-based company did not give details on the jewelry with a report it recently published. However, jewelry and watches was a top performer, along with other categories that experienced year-over-year growth of 15 percent. They include: digital content and subscriptions, event tickets, consumer electronics (excluding computer peripherals) and computer software.

Overall online retail spending reached $36.3 billion for the third quarter, up 13 percent, comScore said. This represents the eighth consecutive quarter of positive year-over-year growth and fourth consecutive quarter of double-digit growth rates.

“The third quarter of 2011 saw a continuation of the year’s strength in U.S. retail e-commerce spending, even in the face of renewed economic headwinds and uncertainty facing the U.S. consumer,” said Gian Fulgoni, comScore chairman. “As we approach the critical holiday shopping season, we are optimistic about the continued health of the e-commerce sector despite other factors—including stubbornly high unemployment and volatile financial markets—currently weighing on the economy.”

The 13-percent growth in the quarter was primarily a function of an increase in the number of buyers (up 22 percent), the Reston, Va.-based company said. About 74 percent of all Internet users made at least one online purchase during the quarter.

A total of 40 percent of e-commerce transactions included free shipping, down from a peak of 49 percent in the fourth quarter of 2010. Free shipping rates tend to peak during the holiday season.

Blue Nile CEO Resigns; Q3 Sales Up 11%

Diane Irvine

Diane Irvine, Blue Nile CEO, president and director, who has been with the diamond and fine jewelry online retailer since the company was founded in 1999, has resigned, effective November 11. The announcement came just minutes before the Seattle-based company reported that third quarter sales increased 11.2 percent to $75 million. Operating income for the quarter totaled $2.9 million, representing an operating margin of 3.8 percent of net sales.

Vijay Talwar, senior VP and general manager of the company’s international business, has been appointed interim CEO. During the transition period, chairman Mark Vadon, who founded the company, said in a conference call that he will take an active role in the leadership of the company, working closely with Talwar. With the support of the Board, Vadon said he will lead the search for a permanent CEO.

“Diane has been with Blue Nile since its formation and we wish her well in her future endeavors,” Vadon said. “Diane has worked with me on the business since 1999. She has been a tremendous business partner, making countless contributions in her 12 years at Blue Nile. During Diane's tenure as CFO and CEO, the company has grown sales from $14 million to over $300 million and has become one of the world's largest fine jewelers.”

Talwar joined Blue Nile in August 2010. From November 2010 to August 2011, Talwar also served as Blue Nile's CFO. Prior to Blue Nile, he served as CEO of the William J. Clinton Foundation in India, where he provided strategic, financial and operational leadership across health care and sustainability programs in India and South Asia. Before joining the Clinton Foundation, he was at Nike, where he held a number of executive leadership positions, including COO for Nike CEMEA (Central Europe, Middle East and Africa) based in Amsterdam.

“Serving both as the head of international operations and as the company's Chief Financial Officer, Vijay has developed a deep understanding of the Blue Nile business,” Vadon said. “Further, his strong branding experience makes him ideally suited to lead the company's daily operations during this transition period.”

Blue Nile Highlights for the third quarter, ended October 3, include:

* International sales grew 54.8 percent in the quarter to $14.4 million, a record level for any third quarter in Blue Nile's history. Excluding the impact from changes in foreign exchange rates, international sales increased 46.2 percent.

* Gross profit for the quarter totaled $14.8 million, an increase of 1.4 percent from the prior year. As a percentage of net sales, gross profit was 19.8 percent compared to 21.7 percent for the third quarter of 2010.

* Selling, general and administrative expenses for the quarter were $12 million, compared to $10.4 million in the third quarter of 2010. Selling, general and administrative expenses included stock-based compensation expense of $1.6 million in the third quarter.

* At the end of the third quarter, cash and cash equivalents totaled $40.2 million.

* During the third quarter, Blue Nile repurchased 880,300 shares of its common stock for $30.9 million.

“Our record third quarter sales exceeded the high end of our guidance and was driven by solid growth in our engagement and non-engagement businesses,” Talwar said. “We also continue to experience exceptional growth in our international business, validating the value proposition we have for our consumers abroad. Overall, engagement sales growth at the high-end continues to perform very well, showcasing the depth of selection we have in the luxury category. Key to our strategy, we will continue to aggressively invest in our brand and business through marketing programs and additional merchandising assortments. “During the quarter, we repurchased $30.9 million of stock, underscoring the confidence we have in the long-term potential of our business.”

Jewelry and Watch Brands Score Low on their Digital IQ

E-tailers and department stores lead the rankings and Jewelry & Watches and Accessory brands lag behind in their digital IQ.  Image source: Digital IQ Index: Specialty Retail, L2

E-tailers have the highest digital IQ, department stores saw the largest gain in their digital IQ during the past year and the digital IQ of home furnishings brands fell from the prior year. However, it is jewelry and watch brands who rate below every category with the exception of accessories.

The good news is that with a score of 68 the jewelry and watch category “vastly improved (over 2010 results) as brands began making investments in social media,” according to L2, a digital think tank, which published the ranking of 64 companies in eight specialty categories.

For its second annual survey titled, Digital IQ Index: Specialty Retail, L2 based its ranking on the following criteria:

* Website functionality, content and brand translation, 30 percent;

* Digital marketing, 30 percent;

* Social media 20 percent; and

* Mobile, 20 percent

This year’s rankings placed a stronger emphasis on the explosion of mobile purchasing (m-commerce) and the exceptional growth of facebook as both a social media marketing tool and as a newly minted e-commerce platform, known as f-commerce.

Based on the criteria, a scoring methodology was created and rankings for the brands were based on the following categories.

Genius, 140 and above;

* Gifted, 110 - 139;

* Average, 90 - 109;

* Challenged, 70 -89;

* Feeble, 70 and below

The only jewelry and watch brand that made the Gifted” category was Tiffany, which ranked 19th overall with a score of 118. “A jewel of a mobile app and smart digital cross promotion,” the survey noted.

Even e-commerce diamond jewelry standout, Blue Nile, took a hit in the survey, ranking 38th overall, which places it in the “Average” category with a score of 98. “Dated site for a child of the medium,” according to the L2 survey. Ouch.  

Others getting an average grade are

* 43 Cartier, score of 96, “Good-looking, but faulty site mechanics;”

* 45 Swarovski, 94, “Social media properties shimmer, but site has lost its sparkle;” and

* 47 Swatch, 92, “Multi-site e-commerce navigation lacks intuition.”

Zales Jewelers, which ranked 52nd, was the only watch and jewelry brand in the “Challenged” category with a score of 83; “Enhancing mobile and YouTube offering would help.”

Then there’s Tourneau, which ranked dead last in the survey at 64th with a score of 43. It is one of only two brands to place in the “Feeble” category for failing to have an e-commerce site. “Clock is ticking before getting completely left behind,” the survey states.

No jewelry and watch brands made the Genius category.

“On average, users spend more time on brand sites with higher Digital IQs,” L2 said in its survey. “This uptick in site visits also translates to more site visits per user and higher frequency visits.”

There is some good news in the survey for jewelry and watch brands. It includes:

* Tiffany & Co. is among those considered a facebook overachiever based on its facebook page popularity;

* Swarovski facebook page attracted nearly 1.3 million "Likes," the ninth highest among those surveyed.

* Cartier has one of the fastest growing twitter accounts, ranking eighth overall;

* Cartier ranks third and Tiffany ranks fifth among brands with the most upload views on YouTube; and

* Cartier's Calibre de Cartier, Mechanics of Passion, (Short Version) Youtube video is among the most popular brand videos, ranking eighth, with more than 1.3 million views.

Other survey highlights after the page break:

Internet Retail Sales Up 14%

U.S. e-commerce sales in the second quarter of 2011 increased 14 percent, year-over-year, to $37.5 billion, according to digital measuring company comScore Inc. This growth rate represented the seventh consecutive quarter of positive year-over-year growth and third consecutive quarter of double-digit growth rates.

“The second quarter of 2011 saw a continuation of this year’s solid double-digit growth trends in online spending, well ahead of the rate of growth in consumers’ overall spending,” said comScore chairman Gian Fulgoni. “As a result, it’s clear that consumers are continuing to shift to the online channel, with almost $1 in every $10 of discretionary spending now occurring online.”

The Reston, Va.-based company reports that growth rate in the quarter was primarily a function of an increase in the number of buyers (up 16 percent), with 70 percent of all Internet users making at least one online purchase in the quarter.

Fulgoni said that consumers are being won over by the convenience and lower prices of the e-commerce platform over other retail.

“At the same time, we are constantly reminded of an overall macroeconomic situation that is not indicative of a strong recovery,” Fulgoni added. “With economic growth remaining soft, the unemployment rate stubbornly high and financial markets in turmoil, consumers are less optimistic today than they have been in preceding quarters, which raises concerns for the future. We believe the third quarter will be an important indicator of which direction this economy is really headed and what that will mean for consumer spending.”

Other second quarter highlights include:

* The top-performing online product categories were: Consumer Electronics (excl. PC peripherals), Computer Hardware, Computer Software, and Event Tickets. Each category grew at least 15 percent vs. year ago.

* The top 25 online retailers accounted for 66.4 percent of dollars spent online, down from 67.7 percent a year ago and down from a peak of 69.9 percent in Q3 2010, as small and mid-sized retailers continue to regain lost market share.

Blue Nile Sets First Quarter Sales Record

Blue Nile, Inc. reported Thursday that net sales for the first quarter of 2011 increased 8.3 percent to $80.2 million, a first quarter record for the diamond and fine jewelry online retailer. Operating income for the quarter totaled $3.5 million. Net income totaled $2.4 million.

"We delivered record first quarter sales reflecting the strength of our consumer proposition and our relentless focus on perfecting the customer experience,” said Diane Irvine, Blue Nile CEO. “We remain focused on our key objective of building our business in the U.S. and internationally by investing in growth initiatives from product innovation and marketing to continued enhancement of the Blue Nile experience.”

First quarter financial highlights include:

* International sales grew 34.4 percent to $12.9 million, a record level for any first quarter in the company's history. Excluding the impact from changes in foreign exchange rates, international sales increased 28.1 percent.

* Gross profit for the quarter totaled $16.9 million, an increase of 7.1 percent. As a percent of net sales, gross profit was 21.1 percent compared to 21.3 percent for the first quarter of 2010.

* Selling, general and administrative expenses for the quarter were $13.4 million, compared to $12.2 million in the first quarter of 2010. This figure includes stock-based compensation expense of $1.7 million, compared to $1.8 million in the first quarter of the prior year.

The Seattle-based company in its guidance said it expects In its second quarter net sales to be between $82 and $85 million.

Double-Digit Growth Expected For Online Retail in U.S., Western Europe

Online retail in both the U.S. and Western Europe will continue on a double-digit growth trajectory over the next five years, according to two recently released forecasts by Forrester Research, Inc.

Both U.S. and European online retail will grow at a 10 percent compound annual growth rate from 2010 to 2015, reaching $279 billion and €134 billion ($185.1 billion), respectively, in 2015. The forecasts include business-to-consumer sales excluding travel and financial services.

“The online retail market in both the U.S. and Western Europe remains strong, despite the challenging economy,” said Patti Freeman Evans, Forrester VP and Research director. “In fact, with consumer purchasing behavior returning to normal, U.S. Web sales in 2010 actually accelerated over 2009 compared with the prior year, growing 12.6 percent. In Europe, very strong growth in 2010 was fueled by new online buyers and higher-spend per capita on the demand side, as well as the launch of transactional websites by established offline players.”

Retailers are supporting consumers' increasing use of the Web in the U.S., helping to drive growth with new business models, such as flash sales and group buying, as well as improved merchandising to provide a broad selection of products available online, Forrester says. However, this growth comes at the expense of brick-and-mortar stores, as consumers increasingly spend on the Web.

In Western Europe (which consists of 17 Western European nations), the online retail market grew 18 percent from 2009 to 2010 and is projected to grow 13 percent from 2010 to 2011, but growth rates will then slow as the market matures and buyer penetration begins to level off, Forrester says. By 2015, 68 percent of online adults will have made a purchase online; however, northern European countries will see 80 percent or more of their online population buying on the web, versus less than 50 percent in southern countries.