Holiday Season Not Jolly For Signet Jewelers

12/01/2017 14:11

Announcing the results of a disappointing Holiday Season (the nine weeks ended December 31, 2016), Signet Jewelers Limited, the world's largest retailer of diamond jewelry said its same store sales had decreased 4.6% during the crucial period, compared to an increase of 5.1% during the corresponding period a year earlier. Total sales at $1,940.9 million were down by $104.2 million or 5.1% as compared to an increase of 5.3% in the prior year, the retailer noted, adding that the decline was driven principally by underperformance in its Sterling division e-commerce business. In constant currency terms, sales decreased 3.3% compared to an increase of 6.6% in the prior year. JCK's Rob Bates writes, "Executives blamed [the decline] on a decrease in mall traffic, a tough jewelry market, and technical problems at its Sterling division e-commerce sites."

According to CEO Mark Light, the results were “below expectations” and “disappointing.” Light explains: “A preliminary view of market data suggests that the jewelry category was broadly flat to modestly down with in-store sales down mid-single-digits and e-commerce sales up double-digits. Signet’s in-store results were in-line with the jewelry market, but technical performance issues in Sterling’s e-commerce platform largely led to Signet’s lower-than-expected results. Sterling’s challenges in its e-commerce platform were due to recent enhancements that did not perform as expected when exposed to high holiday volume." He add, "We are investing and directing more resources to improve the functioning of the platform and the overall customer digital journey." Overall, e-commerce sales, at $142.5 million, were down $3.5 million or 2.4% compared to $146.0 million in the year prior.

Bates quotes Light from the conference call following the publication of the results: "“The jewelry industry has been a consistent growth industry for over 20 years,” he said. “For those years, Signet has outpaced the industry.… All the research that we have done—and we have done some recent research into late November—[shows] consumers still find jewelry as a wonderful way of emotion and love, and they still hold the product in favor, including the millennials.”