QVC may cut back gold airtime as prices soar

By Humeyra Pamuk

LONDON, April 24 (Reuters) - Television shopping channel retailer QVC is mulling cutting back airtime allocated to gold jewellery because high prices have sapped its appeal.

"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 (LCAPA.O), 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 jewellery for over a year now.

Industry officials had forecast steadier prices this year would help price-sensitive jewellery demand to recover, but a rise of more than 14 percent since the start of the year has hit hopes.

"The expectation was that once these prices leveled out the customers would get used to the pricing but the volatile gold market has not allowed that," Markstein said.

"But the jewellers cannot charge customers any more for gold than they already do. I think they are really at a point now where they just have to maintain the price that the customers will pay for it."

Markstein said customers had shifted to cheaper alternatives like steel, or a combination of gold and silver.

PRODUCT GAME

"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 jewellery 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.