The Signet Group plc, the London-based parent of Sterling Inc., the second largest U.S. retail jeweler, intends to convert its financial reporting from pounds sterling to U.S. dollars.
Signet, the world’s largest retail jeweler said Thursday the changeover, if approved by shareholders and the courts, would begin with its next fiscal year, in February 2007. (Future dividends will be declared in U.S. dollars, but shareholders with an address in Great Britain, or those who so choose, will continue to have theirs paid in sterling.)
“More than 70 percent of its sales, operating profit, and net assets (including almost all its borrowings), are denominated by U.S. dollars,” it notes.
Signet’s directors will seek shareholder approval to “redenominate its share capital into U.S. dollars” at a Dec. 12 general meeting in London.
However, despite the dominance of Sterling (based in Akron, Ohio) and U.S. dollars in Signet’s operations, there are no plans to move the headquarters to the United States.
“The company will continue to be registered and have its headquarters in England and will maintain its primary listing on the London Stock Exchange, with the shares quoted in sterling,” says the Signet Group announcement. It will also maintain a listing on the New York Stock Exchange, with its American Depositary Receipts quoted in U.S. dollars.”
The announcement came in Signet’s third quarter report. The company said total sales rose 5.7 percent in the third quarter (to about $626.5 million total, of which $449.4 million, a 7 percent gain, came from Sterling). Same-store sales were up 5.4 percent. Sterling, the U.S. division, saw its same store sales rise 6.5 percent.
For the year-to-date, there was about $2.1 billion in total sales, a 10.2 percent rise, of which about $1.6 billion, a 13.3 percent gain, came from U.S. Same store sales rose 5.3 percent. Both Ernest Jones and H.Samuel, in the British division of Signet, were down, but same store sales were up 6.9 percent for Sterling Inc.