|
TWST: What is Charles & Colvard?
Mr. Thomas: Charles & Colvard was founded to commercialize a new jewelry
product named moissanite. Moissanite is a silicon carbide crystal that
is grown. It is a synthetic version of a natural mineral. The initial
distribution and business model had some issues that proved to be hard
to overcome. The company first attempted to distribute directly to
independent jewelers in this country and then formed a partnership with
distributors internationally. That business model did not work, and in
the summer of 2000, it was abandoned. In 2000 we adopted a more
traditional jewelry industry distribution pattern, and we now sell to
jewelry manufacturers and distributors, both domestically and
internationally. The company has been successful in executing the new
business model and has been profitable now for 21 consecutive quarters.
Moissanite is a unique jewel that has found increasing acceptance in the
jewelry industry as they have come to understand our marketing
positioning and our message to consumers. Initially, because moissanite
does resemble a diamond, the jewelry industry was afraid that moissanite
would cannibalize some of the other jewelry categories. Our positioning
is that moissanite is a unique jewel for women for self-purchase ' not
as a gift, but as a luxury fashion accessory. Women have found it for
themselves. Increasingly, retailers are discovering that our positioning
works. Women do buy moissanite jewelry for themselves, and it does not
cannibalize the other categories in the jewelry range. So we have
successfully demonstrated to jewelers that moissanite competes well with
the other luxury fashion items such as designer handbags and shoes. The
jewelry industry is in the process of adopting our thinking on this as a
way to increase their revenue and profits without damaging any other
category. TWST: What is the agenda at this point? What are your priorities for the
next 12 months?
Mr. Thomas: We do have some established relationships with major
retailers such as JCPenney. The 2006 plan is to expand distribution in
those stores and do horizontal distribution ' in other words, more
retail space in those specific stores. So we have broadened the category
and support those retailers that have really demonstrated an
understanding and a willingness to work with us. At the same time, we
believe we will add about 1,000 new outlets in North America during
2006, and that's a significant expansion. We are still on track as a
growth entity. We hope to grow same-store sales and build new
distribution outlets throughout the course of 2006 and beyond. The
issue is that when you are looking at this company quarter over quarter,
there are big sell-ins from time to time and the sell-through takes a
while to develop. We cannot share what same-store sales are because we
don't get that from every retailer. The ones we do get sell-through data
from are protective of that information and rightly so.
Tickers included in this excerpt:
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
|
|
