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Merrick, NY--As The Centurion has been reporting, jewelry was one of the top sellers for holiday 2010. But it’s not just jewelers who are happy. Retail sales are up across the board, with final increases topping 5% and retailer margins strong due to careful management of costs and inventory levels. The National Retail Federation had already raised its holiday projection to a 3.3% increase over last year’s figures, up from its original 2.3% prediction going into the season, while Bloomberg.com on Tuesday reported a 5.5% increase. Luxury sales, including jewelry, increased 6.7% over last year’s figures, compared with a paltry increase of 0.9% in 2009 over 2008, said Bloomberg, which also cited an expected 10% increase in North American sales at Tiffany & Co. MasterCard Advisors' Spending Pulse, meanwhile, reports jewelry sales for the season are up 8.4% over last year, and luxury sales excluding jewelry up 6.7%. Its data is based on an aggregate of sales activity within the MasterCard network, and its report covers the 50-day period from November 5 through December 24, 2010.

For the first time in more than a decade, apparel was a particularly strong category for holiday. Many goods sold through at full price, and promotional goods were planned as such, so while consumers responded well to the perceived bargains, retailers were equally satisfied with the margins. Electronics, on the other hand, filled less of the overall holiday till than in recent years. While the category saw a rise in unit sales, falling prices on key items such as flat-screen TV’s pulled overall totals down.

Luxury specialty stores like Neiman Marcus, Bergdorf Goodman, and Nordstrom all have reported very strong sales, especially in handbags, accessories, shoes, jewelry, and watches—categories that have been driving the resurgence of luxury overall. Henri Baguirdjian, CEO of Graff in America, told Women’s Wear Daily the jeweler was 30% ahead at its New York store, and he’s bullish on 2011. At Bergdorf Goodman, two strong jewelry sellers were Paul Morelli’s meditation bells and Monica Rich Kosann’s heirloom lockets. Nordstrom reported strong sales across all price points of jewelry and particularly in watches.

Additionally, reports in WWD point to renewed growth and investment in the luxury watch category for 2011. Luxury watch sales have rebounded significantly in 2010—some as much as 29% over 2009—fueled by a rising stock market in the United States, a return of big bonuses in the financial sector here, and increased sales to Asian consumers. This is a huge turnaround from 2009, when exports of Swiss watches fell 22.3%.

Richemont brand Officine Panerai, for example, is planning significant retail growth. At present the brand has only about 500 points of sale worldwide, including 100 in the United States. It has 24 company-owned boutiques worldwide (three in the United States) and plans to increase that number to 100 over the next three years.  It is not, however, planning increased wholesale distribution.

Philippe Pascal, president of LVMH’s luxury watch and jewelry group, told WWD the company has made significant marketing investments in key brands like Tag Heuer, Hublot, and Zenith, in key markets, including the United States. Omega also plans significant investment in the American retail market—30 stores by the end of 2011—while Bvlgari is targeting major growth in China.

While “frugal fatigue” has set in, releasing pent-up demand, the impact of the past two years is evident in consumers’ selections. While consumers are willing to spend for self as well as gifts, they demand value. Though undeterred by five-figure price tags, luxury shoppers insist on a valid justification for the cost, such as hand-made quality, brand heritage, limited edition, and so forth.

Moderate watch brands also have performed very well this season, according to WWD. In that sector (priced under $1,000) the driver is fashion, and it’s a strong self-purchase category as the lower price means it doesn’t require a spousal conference prior to purchase. Color, interchangeable faces and straps, and other fashion elements are drawing this customer. The watch is viewed as an accessory that happens to tell time, not necessarily a timepiece that also looks good.

The rising price of gold (over $1300/oz) is helping drive watch sales, as well as sales of gem-set jewelry, sterling silver, and mixed metals, says WWD. The trend is expected to continue in 2011.