Signet Sales Rebound After Huge Drop

Signet Jewelers posted unsurprisingly mixed results for its most recent quarter, though sales improved substantially as the quarter went on.

Same-store sales fell 68.5% in May and 21.8% in June, but dipped only 1.3% in July. In addition, preliminary August comps rose 10.9%, which includes a 65.2% jump in e-commerce.

Overall comps fell 31.3% in the second quarter of fiscal 2021 (ended Aug. 1), with e-commerce sales rising 72.7% and brick-and-mortar sales falling 45.3%. The company ended the quarter with an $89.7 million operating income loss.

In a conference call following the release of its financial results, CEO Gina Drosos (pictured) said that the company’s ongoing pivot to digital has been accelerated by COVID-19.

While e-commerce accounted for only 12% of the company’s sales in the last fiscal year, online sales comprised 30% of sales in its most recent quarter. While that was mostly due to brick-and-mortar locations being closed, Drosos noted that higher e-commerce penetration continued even after most of its stores reopened, with e-commerce accounting for 20% of sales in August.

Signet is also seeing the average transaction price rise online—and that number tends to go up when customers work with virtual consultants, Drosos said. So far, the company has booked 300,000 virtual appointments.

Online also seems to be a good tool for attracting new prospects: Drosos said that 40% of its online sales have come from new consumers who have never bought from Signet before.

“Those customers that are purchasing [online] are typically younger and more multicultural than we’ve seen before,” she said.

At the same time, Signet is slimming its brick-and-mortar footprint, particularly in malls. It previously announced that it would close 380 mall locations this fiscal year. So far, it’s closed 293. Overall, the company has reduced its store count by 17% in the last three years.

Drosos said the company is offering more custom options and has seen “a big trend toward more meaningful and sentimental jewelry,” including religious jewelry.

“COVID-19 has caused customers to focus on relationships in new and different ways,” she said.

Bridal has also been strong both in stores and online, she said.

“We are also seeing more engagements happen. Our research showed that 50% of pre-engagement couples decided to quarantine together, and half of them said their relationship got stronger during COVID-19, with only 7% saying their relationship worsened. That is a nice tailwind for our bridal business.”

Drosos acknowledged that the macro environment and months ahead are “full of uncertainty.”

“[There are questions about] a resurgence of COVID, customer demand for more discretionary categories, the election, all sorts of things,” she said. “We have really focused on what we can control, which is being ready, so we can be the jewelry company to serve customers this holiday season. Number one: Our stores are safe. We have partnered with a leading health authority and developed a proprietary program called Love Takes Care.”

Signet is also opening 80 James Allen store-in-stores in Jared locations.

(Image courtesy of Signet Jewelers)

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JCK News Director

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