The Brazilian jewelry market showed a sales recovery in 2021, having closed the year with a 20% growth in revenues, reaching $4.5 billion. This year, the recovery trend continues, and the sector expects an advance of 10% to 15% in sales if there is no great instability because of elections in Brazil or geopolitical issues in the international market. The information is from the Brazilian Gems and Precious Metals Institute (IBGM).
“A lot of people stopped traveling abroad during the pandemic and this had a positive impact on the sector. The sector benefited from this situation in Brazil,” said Ecio Duarte, head of IBGM. The executive estimates that the sector will resume this year the sales level of 2019. According to data from the Ministry of Economy, imports of jewelry items grew 55% in 2021 compared with the previous year, totaling $64.5 million. Exports from the sector, meanwhile, grew by 10.9% to $146.4 million.
“Last year was a year of growth and market consolidation, with store expansion and omni-channel strategy,” said Otavio Lyra, Vivara’s chief financial and investor relations officer. In 2021, Vivara opened 41 stores, 21 of which are Vivara and 20 of which have the brand Life, reaching 246 stores and 29 kiosks. “This year we will have more openings than last year,” Mr. Lyra said.
Sales in the first nine months of the year grew 56.3% compared to the same interval of 2020 and 20% over the result of 2019, totaling R$916.9 million. Net income increased 220.4% over 2020, to R$171.4 million. The profit margin grew 9.6 percentage points, to 18.7%.
At B3, Vivara’s common shares did not follow the sales performance. In 2021, the shares fell 12.64%, a deeper drop than that seen by the benchmark stock index Ibovespa, which fell 11.93% in the period. This year until Thursday, Vivara is up 2.48%, while Ibovespa rose 8.31%.
Mr. Lyra noted that the company has increased raw material inventory since the end of 2019 and expanded production at the Manaus plant. “We bought the raw materials at the right price. In doing so, we had less impact on the average cost of products,” the executive said.
Another factor that helped the company’s results, according to Mr. Lyra, was the production of more traditional jewelry items, such as rings, half rings, solitaire rings and chains. For 2022, the company expects to have stronger growth than last year.
Monte Carlo Joias, which runs 50 stores in the country, also saw last year a firmer demand for more timeless pieces, such as half rings, chains, yellow gold pieces, and in the jewelry section, diamonds. “For us it was a year of record sales, it was very good. Consumers came back to the stores and online sales grew more than 30% after having a four-fold increase in 2020,” said Renato Balbi, CEO of Monte Carlo.
Monte Carlo reported that it ended 2021 with a 25% increase in total sales. Revenue is kept confidential by the company. For this year, the jewelry store projects growth of 15% to 20% in store sales and 25% in online sales. “The jewelry store that can offer an omni-channel experience gets better results. The larger chains have been more successful in this aspect,” Mr. Balbi noted. Monte Carlo opened five stores in 2021 and plans to open six to eight stores this year. “I believe there is room to get to 200 stores in the long term,” Mr. Balbi said.
Jewelry chain Antonio Bernardo, which operates 11 stores in the country, saw stronger demand for more traditional pieces. “In 2021, we had a stronger demand for gold and diamond jewelry. Jewelry to mark a moment and tell a story,” said Barbara Hermann, Antonio Bernardo’s industrial head. The company did not comment on its sales performance in 2021.
Already the Danish jewelry company Pandora, which has 120 stores in Brazil, saw more expressive sales of silver items and jewelry. The company invests globally in the adoption of artificial diamonds instead of natural diamond, for being more sustainable and having a better cost-benefit relation. “We expect the use of mixed materials such as artificial diamonds to grow. Consumers are already inclined to purchase jewelry made with sustainable sources of gold and silver,” said Martín Pereyra, Pandora’s general manager for Latin America.
The executive said that Pandora does not have results breakdown by country, but that Brazil may contribute to the company’s expectation of global organic growth of 3% to 6% this year. Mr. Pereyra said sales grew in Brazil last year, with “very strong acceleration at the end of the year, which will continue into 2022 and beyond.” Pandora opened five stores in Brazil in 2021 and has plans to open more units in the country this year. But the number is kept confidential.
Roseli Duque, CEO of IBGM, said that the price of jewelry tends to remain stable this year compared to 2021, because of the weakened real against the dollar and the prices of gold compared to last year, which would offset the 10% inflation in the sector over the past 12 months.
The executive added that the trend for this year is for jewelry combining stones of the same color, but with different shades. Rings with coats of arms, initials, cufflinks, cameos and jewelry with frames are among the trends in the current collections. “Jewelry has an air of nostalgia this year. Chains with links, jewelry in yellow gold, pieces made by goldsmiths, everything that refers to traditions gains strength,” Ms. Duque says.
Source: Valor International