QVC may cut back gold airtime as prices soar
LONDON (Reuters) – Television shopping channel retailer QVC is mulling cutting back the airtime allocated to gold jewelry because high prices have caused its appeal to ebb. «In QVC everything is based on airtime and airtime is dollars per minute,» David Markstein, director of merchandise at QVC, told Reuters in an interview late on Monday. «We will look maybe to cut back gold airtime slightly to give airtime to other areas that are more productive,» he added. »Less airtime obviously means selling less.» QVC, owned by Liberty Media, is one of the largest multimedia retailers in the world, with annual revenues exceeding $7 billion. High and volatile world gold prices, which hit a 26-year peak of $730 an ounce last May, have dented consumer appetite for gold jewelry for over a year now. Markstein said customers had shifted to cheaper alternatives like steel, or a combination of gold and silver. «In such a market, it becomes less of a price game than a product game,» said Markstein. He said Turkey, one of the world’s top jewelry exporters, could have an advantage in such a market with its low production costs, but he listed one disadvantage. «Turkey has casting, stamping, all the things Italy can do but without the creativity,» Markstein said. «The customers have no loyalty toward Turkey, but they do have loyalty toward Italy… The intrinsic value they get from Italy is higher.» Italy used to dominate the world’s gold jewelry manufacturing sector but has run into fierce competition from countries with lower production costs, such as Turkey, India and China. But thanks to its well-established brand name and high quality, it has retained some degree of customer loyalty. High world gold prices coupled with competition from lower cost producers reduced Turkey’s gold jewelry exports by 23 percent in 2006.
