Industry turns in strong holiday 2003: diamonds were a jeweler's best friend this past holiday season, fueling one of the strongest fourth quarters the industry has seen in five years.(The Marketplace)

Many analysts and industry experts are calling the holiday 2003 season the strongest for the jewelry industry since the millennium-charged 1999 season. An upsurge in diamond and diamond jewelry sales helped fuel the positive results. Consumers with pent up demand for luxury goods were more willing to spend in the face of an improving economy and more disposable dollars.

According to the National Retail Federation (NRF), holiday retail sales in the overall category that includes jewelry stores increased 5.2 percent to $216.3 billion, up from $205.6 billion in 2002. This 5.2 percent holiday sales growth more than doubled the 2.2 percent growth seen during the 2002 holiday season, based on NRF figures.

Meanwhile, statistics from the International Council of Shopping Center's (ICSC) Chain Store Sales Index indicated that combined November/December sales grew by 4 percent compared to Christmas 2002.

This fits with the general consensus from analysts and other observers concerning the jewelry industry's performance. Most estimates place the industry's holiday sales at mid single digits. High-end stores and online retailers experienced the strongest growth, with high-single digit to mid-double digit gains year over year. Meanwhile, mid-to-low-end jewelers experienced the smallest gains (flat to low single digits).

The rising fortunes of the luxury sector is a strong indicator that the …