A niche allows strong business focus. Brands are difficult to duplicate. They represent key assets that do not appear on balance sheets. Longstanding, top niche brands therefore protect stock owners with exceptional though subtle values. They offer sound slots for capital faced by uncertainty.
The Jewelry & Silverware Industry is fortunate to be relatively immune to fluctuations in demand. This isolation is not generic, but depends on strong and consistent branding. Certain demographic segments will invest in and gift top brands even though general economic conditions may be depressed. Wrist watches are especially durable in this respect.
This company has an early April 2008 market capitalization just below $500 million. However, it is a giant in terms of some of the most coveted names in luxury watches. The company distributes luxury goods from some seven different stables, apart from its own highly recognized brand. A chain of owned boutiques and a strong chain of wholesalers give the company stable and broad platforms to generate reliable revenues.
The January 2008 quarter, which has seen difficult business conditions for most stocks, has ended for this company with an impressive 3% gain in Net Profit Margin. The management has achieved 14.45% Return on Average Equity over the last four quarters. Stock investors can use these numbers as clear indicators of management capabilities and brand strength. The management has taken decisive steps to eliminate low margin sales channels. It has also leveraged legitimate tax planning measures for the benefit of the stock.
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