Signet to Open 75 to 85 New Kay and Jared Stores This Year

Signet Jewelers will continue to expand aggressively over the next year, opening 75–85 Kays and Jareds, executives announced in a conference call following the release of its financial results.  

The company did not specify where the stores would be located. Chief financial officer Ron Ristau also estimated closing “around 50” stores over the next year. Signet opened 76 new stores in the just-completed fiscal 2014, versus 53 the year before.

The company also posted strong financial results, including record profits, and comp gains in just about every division.

Overall comps were up 4.4 percent for the fourth quarter (ended Feb. 1), and 4.3 percent for fiscal 2014. U.S. comps rose 4 percent for the quarter, and 5.2 percent for the year. Both Kay and Jared recorded strong comps, with same-store sales for Kay increasing 4.9 percent in the quarter and 6.5 percent for the year. Comps at Jared rose 4.1 for the quarter, and 4.7 percent for the year. However, at Signet’s regional brands they fell 3.1 percent for the quarter, and 2.4 percent for the year.

E-commerce sales were up 26.4 percent for the year, to hit $161.4 million.

The U.K. division (H.Samuel and Ernest Jones) also saw sales increases, with comps rising 5.7 percent for the quarter and 1 percent for the year.

Overall company profits for the fiscal year hit $570.5 million, a 1.8 jump over the prior year and a new record.

Leading the charge was the company’s growing collection of proprietary lines. Sales of differentiated and exclusive merchandise jumped 23.2 percent, with CEO Michael Barnes singling out its colored diamond and gemstone items, including Le Vian, Artistry, Vivid, and Shades of Wonder; the Neil Lane, Tolkowsky, and Jane Seymour lines; and the nonproprietary brand Diamonds in Rhythm. Differentiated items now represent close to a third (31.1 percent) of its merchandise mix.

“Our team is getting better and better at the branding,” Barnes said. “The new and exciting merchandise that is what is driving the business.”

Bridal items also saw a double-digit sales increase.

When asked about watches, Barnes called them a “good category for us.”

“In the U.S., it accounts for about 7 percent of our business,” he said. “But it does bring traffic and people into the stores. Hopefully we’ll end up selling some diamonds as well as watches.”

He mentioned that stores are selling Michele and Gucci brands. Jared has begun selling Coach watches, and they have “tested well.”

Barnes added that January sales were “flattish,” but things perked up around Valentine’s Day.

“We were beaten down a little bit by the lower traffic in the malls, and Mother Nature,” he said. “But the customers are resilient. Whenever we had nice open windows of it warming up or snow melting, the customers were coming back into the stores.”

The executives didn’t talk much about the pending acquisition of Zale Corp., but did announce it has recruited consultants McKinsey and Co. to help with the transition.

In an SEC filing, the company said that five lawsuits from what it called “purported shareholders” have now been filed in Delaware court, challenging the merger.

JCK News Director