LJ International Reports Better Than Expected Results From China Retail STORES
November 08 2005 - 4:05PM
PR Newswire (US)
ENZO Sales Total $1.4 million in First Nine Months of 2005, with
Sales at Shanghai Flagship Store Second Only to Tiffany; Shanghai,
Hong Kong Stores Achieve Breakeven Nearly a Year Ahead of Schedule
HONG KONG and LOS ANGELES, Nov. 8 /Xinhua-PRNewswire-FirstCall/ --
LJ International, Inc. (LJI) (NASDAQ:JADE), one of the
fastest-growing jewelry companies in the world, today reported
significantly better than expected initial financial results for
its new wholly-owned ENZO retail chain in China (
http://www.enzojewelry.com/ ). Revenues for the ENZO Division
totaled $1.4 million for the nine-month period ended September 30,
2005. The first ENZO store, in Hong Kong, and its Shanghai flagship
store have already achieved breakeven results on a store- level
basis. These results are well ahead of the Company's earlier
guidance where they projected $1.5 million in ENZO sales for all of
2005 and breakeven results at certain ENZO stores by the end of
2006. Ten ENZO stores, including the Shanghai flagship, have been
opened year- to-date. The Company expects to have at least 12 ENZO
stores open by the end of 2005, with the largest due to open this
month in Macau, East Asia's gaming capital and one of the region's
prime tourist destinations. The number of new ENZO store openings
for 2005, however, could increase as additional real estate becomes
available. Growth Result of Head Start from China's Entry into WTO
Yu Chuan Yih, LJI's Chairman and CEO, commented, 'ENZO's fast and
successful start demonstrates the high demand for our products in
China, the first-mover advantage we have gained from our
supply-chain logistics and by being one of the first foreign-based
jewelry companies to launch a retail chain in China immediately
following the nation's entry into the World Trade Organization
(WTO). As a company domiciled overseas but with longstanding ties
to China through our supply chain advantage, LJI was able to enter
the Chinese retail market early and with a high-profile presence
among affluent consumers in major cities such as Shanghai and
Beijing. That quick start is now paying off faster than we ever
anticipated considering our initial sales results are three months
ahead of schedule and breakeven at certain stores is a more
impressive full-year ahead of schedule." ENZO's High Margins and
Strong Cash Flow to Finance Ongoing Expansion Mr. Yih also noted
that the gross margins of the ENZO division -- 50% or more on
average -- are sharply higher than the roughly 20% margins of LJI
traditional wholesale business. As a result, he said, 'Future sales
growth from ENZO are expected to sharply improve LJI's overall net
income as the division becomes profitable and covers its own
expansion costs. We expect all of our ENZO stores to pass the
breakeven point sometime during 2006, and we do not expect the
addition of new stores this year to require any infusion of new
capital. The expansion of ENZO will continue to be financed
internally, out of cash generated at existing ENZO stores.' LJI
attributes the high gross margins to its mine-to-market vertical
integration strategy, which enables it to design, produce, market
and sell jewelry -- now directly to retail consumers -- without
intermediary costs. At the same time, the Company continues to take
advantage of its large-scale production efficiencies in its sales
to large retail partners, including some of the largest U.S.
jewelry chains, retailers and home shopping channels. LJI to
Provide New Guidance for LJI and ENZO Division in December 2005 The
Company expects to provide additional financial information and
guidance relating to ENZO as well as its overall outlook for LJI
early next month when additional information becomes available. If
you would like to be added to LJI's investor email lists please
contact Haris Tajyar with Investor Relations International at .
About LJ International LJ International, Inc. (LJI) (Nasdaq/NMS:
JADE), based in Hong Kong and the U.S., is engaged in the
designing, branding, marketing and distribution of a full range of
jewelry. It has built its global business, currently one of the
fastest-growing in the jewelry industry, on a vertical integration
strategy and an unwavering commitment to quality and service. LJI
distributes to fine jewelers, department stores, national jewelry
chains and electronic and specialty retailers throughout North
America and Western Europe, with a growing retail presence in China
through its ENZO stores and e-shopping sites. Its product lines
incorporate all major categories sought by major retailers,
including earrings, necklaces, pendants, rings and bracelets. For
more information on LJI, please visit http://www.ljintl.com/ .
Forward looking statement: Except for the historical information,
the matters discussed in this news release may contain
forward-looking statements, including, but not limited to, factors
relating to future sales. These forward-looking statements may
involve a number of risks and uncertainties. Actual results may
vary significantly based on a number of factors, including, but not
limited to, uncertainties in product demand, the impact of
competitive products and pricing, changing economic conditions
around the world, release and sales of new products and other risk
factors detailed in the company's most recent annual report and
other filings with the Securities and Exchange Commission. For
further information: AT LJI: AT INVESTOR RELATIONS INTL: Betty Ho
Haris Tajyar Vice President, Corporate Development Managing Partner
Ph: 011-852-2170-0001 Ph: 818-382-9702 DATASOURCE: LJ
International, Inc. CONTACT: Betty Ho of LJI, +852-2170-0001, or ;
or Haris Tajyar of INVESTOR RELATIONS INTL, +1-818-382-9702, or ,
for LJI Web Site: http://www.ljintl.com/
http://www.enzojewelry.com/
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