Bridal Strong, Bead Sales Weak for Signet in Below-Expectations Holiday

Signet holiday shoppers embraced Vera Wang, bridal, and diamond studs, but turned their backs on beads and lower-price fashion items, the company said after announcing holiday results that came in slightly lower than expectations.

The company recorded a 3.6 percent holiday comp gain over last year, which “did fall a bit below our expectations,” chief financial officer Michele Santana admitted on a conference call following the release of its financial results. “That said, we had a solid performance…but a little bit soft from what we were expecting.”

On the call, CEO Mark Light singled out Le Vian, Neil Lane, Tolkowsky, Diamonds in Rhythm, and diamond stud earrings as the holiday’s big winners, but added that lower price-point fashion jewelry collections disappointed—in particular the Pandora, Charmed Memories, and Open Hearts by Jane Seymour lines. 

Asked about the soft quarter for beads, Light said, “I don’t know if it’s a one-quarter fluke. The bead businesses…are still very, very large businesses for us.”

Beads did do well in the United Kingdom, he added. 

Santana said the company was a little disappointed in the numbers from the Sterling division. The Kay division posted a 3.4 percent jump; Jared sales rose 1.5 percent; and same-store numbers at the company’s regional nameplates fell 1.8 percent. 

Santana and CEO Mark Light admitted the below-expectations numbers for Sterling—particularly for Jared—were sparked by a decision to hold back on promoting this year. 

“Jared [is] an everyday low-price retail concept [which makes business] a little more challenging when you are in a promotional retail environment,” Light said. “20-20 hindsight, we would have put lower price points on TV.”  

The recently acquired Zale division, however, outperformed expectations, with Zales posting a 3.8 percent jump, and sales at the Gordon’s division falling 2.4 percent. Sales at the Canadian division jumped 6.9 percent.

Zales’ success was spurred by solid bridal sales, in part because of the increased weight behind the Vera Wang collection and Celebration Diamond collection. Light said the Vera Wang line represents a major opportunity.

“We believe we are just getting started with [Vera],” he said, noting that the collection is now being tested in the United Kingdom.

The U.K. division emerged as a surprising star this holiday, logging an impressive 9.7 same-store sales jump—its best in 12 years. Sales were led by watches, increased TV advertising, and strong deals for Black Friday, which is “now a big phenomenon over there,” Santana said.

The outlets gave a “fabulous performance,” Santana said, beating expectations. 

E-commerce increased 90.9 percent, and 20 percent without the Zale division.

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JCK News Director