LJ International issues special letter to shareholders

23 Aug '05

5 min read

The rest of the world as a manufacturing powerhouse mostly knows China. But it is also a huge, fast-growing market for retailers. According to a report early this year by Business Week, the nation's overall retail business has risen 15 percent annually for the past 20 years, reaching about $628 billion I n 2004. That makes it the third largest retail market in the world. The mega store chain Carrefour, one of their customers, is now ranked fifth among retailers in China, with some 240 stores there doing $1.8 billion in sales at the end of 2004. Wal-Mart, ranked 16th in the Business Week report, has recently announced plans to nearly double the number of its China stores from the current 48 to 90 by the end of 2006.

LJI: Strong Financial Performance
To review recent results briefly, LJI has continued to exceed it sales goals. In 2004, their revenue totaled $77.4 million, which was 33 percent above the $58.2 million recorded in 2003. The increase exceeded the 26 percent sales jump they saw from 2002 to 2003. In the first half 2005, revenue increased by 19 percent, to $36.5 million from $30.8 million in the first half of 2004. In the latest quarter-the second quarter ending June 30, 2005-they recorded $19.1 million in sales, up 17.3 percent from the second quarter of 2004 and more than $1 million over their previous guidance range.

China Sales Begin to Make Their Mark
During 2004, they opened a new China retail operation, ENZO, and began selling jewelry direct to consumers at their own Mainland outlets. The first of these was a high-end jewelry showroom in Hong Kong, opened last spring. Two stores in Shanghai, one of them being the ENZO flagship store, followed it in the fall. They are stepping up the pace in 2005, having opened four new stores in May and expect five more by the end of this year, including their recently announced 8,000 square-foot store in Macau -- which will represent the single largest retail jewelry store across all of the Greater China Region.

More LJ International Inc News...