Signet’s Comps Fall 5 Percent, Posts Loss

Signet Jewelers posted another downbeat series of results, with its third-quarter sales and profits hurt by the recent series of hurricanes and disruptions as it began outsourcing its credit.

Overall comp sales for the period (ended Oct. 28) fell 5 percent. Flagship chain Kay saw sales fall 7.2 percent. Sales also dropped 5.1 percent at Jared; 3.3 percent at Zales; 15.8 percent at Gordon’s; 1.9 percent at its Canadian division; and 5.1 percent at its U.K. division.

Piercing Pagoda and R2Net (James Allen) were bright spots, with sales rising 2.1 percent and 17.9 percent, respectively.

Overall sales came out to $1.2 billion, down 2 percent from the prior year. The company posted a $12.1 million loss for the period, compared to a $14.8 million profit the prior year.

In a conference call following the release of its financial results, CEO Gina Drosos (pictured) said the company was testing a variety of new products, including its millennial-targeting Interwoven line; Disney Enchanted bridal in Zales; extensions in its Ever Us, LeVian, Chosen, and Vera Wang lines; an Emmy London jewelry line for Kay; and products involving stacking and layering.

She also said the company will cut the number of television commercials it runs in holiday slots by nearly half and will shift its marketing money to digital. Digital advertising will now comprise 30 percent of its marketing budget, up from 19 percent last year.

It’s also increasing by 50 percent the number of fashion products in the $200 to $700 price point range.

Malls, where Signet has traditionally had a heavy presence, continue to be a problem: Chief financial officer Michele Santana said the company’s off-mall stores performed significantly better than its mall stores.

(Image courtesy of Signet Jewelers)

JCK News Director

4 responses to “Signet’s Comps Fall 5 Percent, Posts Loss”

  1. Seems to me that an aggressive strategy to exit C and D malls ought to be very high on their priority list. There’s no salvation in those leaky boats.

  2. They have dropped quality to such a low level even the unsophisticated buyer can see they are overcharging for what they sell

  3. Buying Zales was one of their biggest mistake. Their bad leadership making bad decisions is responsible for their decline. They do not have any freshness in their products plus poor quality, dead merchandise, tired old staff . More decline in sales to come.

    They have to get better leadership and get their act together.

  4. Offering sub-prime credit was the only way they sold anything at all at Kay and Zales…quality and value are much less important to buyers who have no cash invested and can’t buy anything any other way. But now that cash cow is dead, and soon those chains may be too.

    They should shut down hundreds of them asap, especially high rent corners in malls. But contrary to exiting malls entirely, instead expand into every lower and mid-tier mall possible, but only with their low-overhead and highly mobile kiosk biz, Piercing Pagoda.

    Hold steady with off-mall Jared and try to bring it back to higher-end goods and service, that’s the only way they can hope to compete in the new brick-and-mortar environment.

    And lastly, if it’s not too late, results prove a shift in focus and marketing to e-commerce is critical.

    That’s a three-pronged approach to salvation that might save this Titanic from the inertia of bad and cumbersome decision making and management, and the giant icebergs of a changed market challenge.

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