New York—All retail categories saw sales growth in 2006, according to Jewelers of America's (JA) 2007 Cost of Doing Business Survey, released today.

The survey analyzes JA member stores' financial data from 2006. This year, 395 companies, including independent high-end firms, independent mid-range firms, jewelry chains and designer or custom jewelers, responded to the survey.

Median growth for all jewelers in 2006 was 4.1 percent, up from 3.9 percent in 2005. Independent high-end retailers showed the greatest growth in 2006 with a 7.4 percent sales increase, which is in line with the 7.1 percent increase in jewelry sales nationwide, according to IDEX Magazine. Designer and custom retailers also fared well in 2006 with a 6.5 percent sales increase, followed by chain stores with a 4.3 percent sales increase. Mid-range retailers saw the least growth in 2006 with only a 2.4 percent sales increase.

Store profitability increased 32 percent in 2006. JA retailers had a median 5.3 percent net profit as a percentage of net sales compared with a 4 percent net profit in 2005. Although gross margins fell last year, the overall gross margin was up to 49.1 percent in 2006 from 48.4 percent in 2005.

Distribution of sales remained constant from year to year. Diamonds (loose and set) are still the biggest seller with 50 percent of sales. Colored-stone jewelry (10 percent) and karat-gold (8 percent) are the second and third biggest sellers, respectively.

Although high-profit stores did not necessarily have greater sales per store in 2006 ($985,000 on average compared with $1,179,000 for low-profit stores), they exhibited efficient management with higher sales per square foot and turnover frequency, but lower payroll and operating expenses. For example, high-profit stores had a 20 percent greater inventory turnover compared with low-profit stores and, therefore, much higher sales growth (6.8 percent compared with 3.7 percent).

High-profit retailers also contained their operating expenses by spending less net sales on payroll (17.8 percent compared with low-profit firms' average 22.4 percent). The survey shows that high-profit retailers' efficiency at saving on expenses allows them to spend 7.2 percent less on total operating expenses compared with low-profit firms.

To order the 2007 Cost of Doing Business Survey, visit JA's Web site, Jewelers.org, or call (800) 223-0673. The survey costs $24.95 for members, $150 for non-members.