However, a decade on, the 13-store chain has reported an increase in Australian revenue from $2.59 billion in 2020 to $2.82 billion in 2021, while its profit more than doubled from $22.22 million in 2020 to $46.39 million this year.
The results are recorded to 31 August each year.
Patrick Noone managing director Costco Australia told The Australian that the company had performed strongly throughout the COVID-19 pandemic and the resulting travel restrictions, and that Costco’s jewellery category was increasing sales in the face of the company not being considered as a ‘typical’ shopping choice for a diamond engagement rings.
“Jewellery has done exceptionally well for us this year, I think people are at home and getting married, having babies and a lot of diamonds have been selling,” Noone said in The Australian article titled, Diamonds are Costco’s best friend as sales in Australia race to $3bn.
“Diamonds did well, we sell gold, and that surprised us a bit as well in terms of selling well.
"I think it is mainly we are getting traction with the quality of the goods, we are seeing $10,000 diamond rings being sold for weddings, $15,000 earrings and things like that and when people compare the quality out there in the market place and the savings it has proven popular," Noone said.
The trend is not restricted to Australia. Strong jewellery sales helped boost Costco’s internationbal Q4 e-commerce revenue by almost nine per cent, according to Richard Galanti, chief financial officer.
On 9 December, during an Earnings Call - a conference call between the management of a public company, analysts, investors, and the media to discuss the company’s financial results during a given reporting period – Galanti told participants that jewellery was among Costco’s strongest departments with a 20 per cent jump in total revenue to $US1.67 billion for the quarter.
The Motley Fool finance website reported that Galanti said: "We actually sold a couple of rings in the $100,000 range.”
“In terms of e-commerce sales in the quarter, ex FX [foreign exchange] increased 13.3 per cent year-over-year, and that's, of course, on top of an 86 per cent plus increase a year ago in the first quarter. Stronger department in terms of year of percentages include jewellery, tyres, and home furnishings.”
During a March 2020 Earnings Call, Galanti said, “We recently sold another high-value large carat diamond for a little over $US600,000", while in May 2019 he claimed a customer had purchased a $US400,000 diamond ring from the supermarket.
Costco is reported to be North America's fourth-largest retailer of fine jewellery and watches after Signet, Walmart and Tiffany, however; the company’s jewellery and watch departments have not been without controversy and legal action.
In 2010 Swiss watch brand Omega began, what was to become a long legal battle to stop Costco stocking and selling its watches at massive discounts – reportedly up to a third less than US retail.
While that case was proceeding – it eventually took five years – Tiffany & Co., the iconic US jewellery brand, began legal proceedings to stop Costco from selling, what it described, as counterfeit diamond engagement rings bearing the luxury retailer's name.
The case lasted eight years.
| 2010 | MAY | Massive Swiss watch discounts revealed
Swiss watch behemoth Swatch Group sues US supermarket behemoth Costco, to stop its watches being sold at massive discounts – reportedly up to a third less than US retail – in a case being monitored by all luxury brands. Read more » |
| 2013 | FEB | Tiffany & Co sues supermarket chain
Lawyers for Tiffany & Co claim that hundreds, if not thousands, of Costco members were misled and bought engagement rings they believed were authentic Tiffany products. Tiffany & Co sues in a bid to stop the largest US warehouse club chain from selling what it described as counterfeit diamond engagement rings bearing the luxury retailer's name. Read more » |
| | MAR | Leaked email could affect Tiffany case
In one of many twists in the legal battle between Tiffany & Co and Costco, a leaked email emerges, allegedly from Costco’s CEO, stating that he believed the company was wrong to use the term “Tiffany” to describe rings Costco was selling. The email was reportedly sent to all Costco employees from CEO Craig Jelinek, saying he was disappointed that an amicable settlement hadn’t been reached. Instead, the dispute is being played-out as legal suit and countersuit before the courts. Read more » |
| | APR | Tiffany vs Costco: Round 3
Lawyers for Tiffany & Co go back to court in an attempt to have Costco’s counterclaim that a “Tiffany setting” is generic, thrown out. In a complex matter, Tiffany's original lawsuit against Costco in February did not accuse the supermarket giant of using the phrase “Tiffany setting”. It alleged that Costco used the mark “Tiffany” alone to describe two multi-thousand dollar engagement rings, the styles of which replicated a ring with a real “Tiffany® setting”. Read more » |
| 2014 | JAN
| Tiffany and Costco battle continues
The dispute around the use of “tiffany setting” is set to continue after a US Federal Court declares there was a “genuine factual dispute” over its use as a generic term. Tiffany & Co’s attempts to dismiss the Costco counterclaim that “tiffany setting” is a generic term is thrown out by a US Federal Court. Read more » |
| 2015 | JAN | Costco wins approval to sell discounted Swiss watches
Five years after suing Costco, Omega is delivered a legal blow when a US court ruling declares that Costco can legally sell Swiss watches at a heavily discounted price, despite not being an authorised distributor. The decision is the latest in a long-held court battle between Costco and Omega, a subsidiary of the Swatch Group. Read more » |
| | NOV | Tiffany & Co claims win in Costco trademark battle
After years of fighting Costco over the unauthorised distribution of its watches, Omega appears to have conceded defeat – but Costco does not have all the luck in court. Read more » |
| 2016 | OCT
| Tiffany & Co receives millions in Costco dispute
Tiffany & Co is awarded millions of dollars in its high-profile trademark case with Costco over the use of the word ‘Tiffany’. Costco is ordered to pay the jewellery company US$13.75 million (AU$18.1m) after it was found to have been illegally using the term “Tiffany” to sell engagement rings. Read more » |
2017 | AUG | Tiffany & Co’s lengthy Costco dispute reaches finish line
Tiffany & Co’s trademark case against retail giant Costco is almost been resolved, with Costco ordered to pay the jeweller US$19.35 million (AU$24.3 m). US district judge Laura Taylor Swain’s ruling states that the court “holds Costco liable for trademark infringement and trademark counterfeiting with respect to engagement rings sold under certain signage that referenced the mark ‘Tiffany’ as a standalone term”. Read more » |
| 2020 | AUG | US court overturns judgment in Tiffany & Co. counterfeit case
The US Court of Appeals for the Second Circuit overturns the judgment against Costco over its use of the Tiffany & Co. trademark, which would have seen it liable to pay $US21 million ($AU29 million) in damages. The dispute – which has proceeded through US courts for more than seven years – centres on a collection of six-prong diamond engagement rings sold by Costco with the descriptor “Tiffany” on the tags and in-store signage. Read more » |