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Jewelry, watches play important role in chain drug sundries mix.

NEW YORK -- Jewelry and watches play an important role in the chain drug sundries and seasonals mix. Last year sales of such merchandise totaled almost $202 million, up 8.2% from those of the prior year. That ranked the segment as the sixth-largest in the overall sundries category.

Besides its contribution to sales and profits, jewelry can also help drug chains in their efforts to position stores to appeal to certain customer demographics.

Benecia, Calif.-based Bill's Drug Stores focuses its merchandising efforts on appealing to its core customers, which the chain's research has revealed to be females in the 18 to 34 age bracket.

"We are constantly working to find out what attracts those customers to our stores," explains buyer Sue Knight. "Among the products that we know interest them are hair accessories, cosmetics organizers, sunglasses and jewelry."

Bill's tries to customize its jewelry mix at individual outlets to appeal to the tastes of the local customer base. The responsibility for adjusting the mix falls to each store's cosmetician.

Many chains have found that positioning jewelry in or near the cosmetics department can be a very effective strategy. Superior Jewelry Co. is leveraging that natural relationship in its latest product lines.

"Through licensing agreements we are using brand names that are already merchandised in the cosmetics departments of chain drug stores," says vice president of merchandising Jamie Boblitt. "One of our hottest lines right now is Charlie, which is licensed from the popular fragrance of the same name."

The line's styling has been well received by chain drug buyers. "The early information provided by retail point-of-sale data has been exceptionally good. We have seen sell-through of 10% to 15% during the first week of promotions that accompany the line's introduction," notes Boblitt.

The company took its lead from the cosmetics category rather than the jewelry category in designing the display vehicle for Charlie. "The cosmetics companies do a good job of providing retailers with a steady flow of monthly promotions, so we designed a countertop display with vivid graphics that ties in nicely with them," Boblitt explains. "We took a leap. There has never been anything as professionally done in the jewelry category for drug chains as this."

Jewelry and cosmetics are a natural match in the chain drug environment because of the fashion nature the categories share. "Discounters have the support of their apparel business to reinforce their fashion positioning, but cosmetics is the only category that really screams fashion in chain drug stores," Boblitt says. "That's a good argument for putting jewelry displays there."

Eagleville, Pa.-based I Got It At Gary's also subscribes to the wisdom of marrying the jewelry and cosmetics categories.

The chain merchandises its cosmetics departments in a boutique style. The sections wide aisles feature numerous displays and broad selections of fashion accessories, including jewelry.

"Our goal is to merchandise in a way that grabs the customers' attention and presents a strong fashion image," says senior buyer Susan Swartz. "Jewelry contributes to the overall statement that we're trying to make."

As is the case in cosmetics, fashion trends can drive sales in jewelry. Most chains rely on a mix that's weighted toward basic merchandise in traditional gold and silver earrings. Nevertheless, trendy items, neckware and pendants give the category its flash.

"Probably 65% of the mix in most drug stores is basic earrings in gold tones, silver tones, pearl and crystal -- the things women wear every day," says Boblitt.

However, neckware is becoming much more important. Neckware sales have risen to about 25% to 30% of category volume from about 15% over the past year or so, and it accounts for up to 50% in some fashion segments.

"Chokers, necklaces and pendants are a fashion trend that had been out of style but is making a strong comeback," says Boblitt. "Drug chains are selling a lot of corded and chain necklaces in lengths up to 36 inches, too. It's fun for customers and for retailers because the products are changing all the time."

Superior tries to introduce some new items about every two months. Its program is structured so that it generally doesn't add new items without marking down current items or taking them out of the stores.

"That way there are a lot of fresh goods coming in and old goods going out," Boblitt explains. "It cycles about every 18 weeks."
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Title Annotation:Perry Drug Stores Inc.
Publication:Chain Drug Review
Date:Nov 7, 1994
Previous Article:Chain benefits from tight focus.
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