I don't think 39% is a big issue especially in an industry where repeat views are necessary.
One of our websites sells cheap portable ramps and has a high percentage of new visitors, due to the fact that there is no reason to come back (they either buy or don't buy).
Another of our sites sells expensive vintage furniture and has a very low percentage of new visitors. There is far more time spent on the buying process, there are also many visits from interior designers who always come back.
I always think that it is dangerous to look at percentages (especially on low traffic figures). For example if you increase the amount of your new visitors the amount of repeat viewers should also increase therefore your 39% may well stay the same (despite the obvious traffic improvement). Look to increase traffic not percentages.
PPC is a good way to get people to your site. You can advertise on words that people don't currently type in to get to your site, this could cut down on repeat viewers clicking on your adverts.
As to why your rankings have dropped can't comment until you post the site!