Signet U.S. Same Store Holiday Sales Down 16%

Signet Jewelers Ltd., the world’s largest specialty retail jeweler, said Thursday that same store sales were down by 15.2 percent for the nine-week period ended Jan. 3. Total sales fell by 19.4 percent on a reported basis and by 13.1 percent at constant exchange rates.

In the U.S., which accounts for about 75 percent of total sales for the group, same store sales declined 16.4 percent and total sales fell 14 percent for the nine-week period, the company said. The average selling price decreased in both Jared and the mall brand stores. In a highly promotional environment, pricing discipline was maintained and the gross merchandise margin increased by about 250 basis points over the comparable period last year.

In the United Kingdom, which accounts for 25 percent of total group sales, same store sales declined by 10.9 percent, with total sales down 33.4 percent on a reported basis and by 9.7 percent at constant exchange rates, the company said.

The average selling price was up in both H.Samuel and Ernest Jones, the company said. Watch participation increased in H.Samuel and the merchandise mix in Ernest Jones was little changed. In a retail marketplace that was extremely promotional, the gross merchandise margin is anticipated to be about 110 basis points below last year’s level as a result of limited additional discounting and mix changes. For the year as a whole gross merchandise margin is in line with last year.

Signet operates 1,979 specialty retail jewelry stores, including 1,418 stores in the U.S., where the group trades as Kay Jewelers, Jared The Galleria Of Jewelry, and under a number of regional names; and 561 stores in the UK, where the group trades as H.Samuel, Ernest Jones, and Leslie Davis.

“Profits for the full year are expected to be within the range of market forecasts despite an extremely challenging environment on both sides of the Atlantic,” said Terry Burman, Signet chief executive. “While Group same store sales were very disappointing, … gross merchandise margin was substantially ahead of last year and costs were very tightly controlled.  Income before income tax for 2008/09 is currently anticipated to be between $180 million and $195 million, after charging $10.5 million of costs related to the change in domicile of the company.  We believe the Group’s strategy of maximizing gross merchandise margin dollars, rather than sales, proved beneficial.”