Executives name culprits: lower mall traffic, a tough jewelry market, and technical problems with e-commerce
Signet’s comps took a 4.6 percent tumble this holiday, a fall that executives blamed on a decrease in mall traffic, a tough jewelry market, and technical problems at its Sterling division e-commerce sites.
Piercing Pagoda was the only Signet nameplate to post a comp gain this holiday, with sales rising 4.2 percent. Otherwise, there were same-store decreases at Kay (4.6 percent), Jared (4.7 percent), its regional brands (16.9 percent), Zales (3.7 percent), Gordon’s (11.7 percent), its U.K. division (3.7 percent), and Zale’s Canadian division (7.3 percent).
On a conference call following the release of the results, CEO Mark Light admitted the results were “below expectations” and “disappointing.”
“Preliminary market data suggests that the jewelry industry was modestly down to nearly flat at holiday,” Light said. “E-commerce in the jewelry industry increased double-digit percentage, while in-store [sales] decreased mid–single digit percentage. Signet’s in-store results were in line with the jewelry market, but our e-commerce significantly underperformed the industry due to Sterling technical performance issues.”
Traffic was so heavy for its sites that Sterling’s legacy systems couldn’t handle it, Light said, though subsequent enhancements should be in place for Valentine’s Day.
Light said the company did score some “wins” this holiday, with healthy sales for its Vera Wang line, Ever Us, and diamond fashion, including earrings and bracelets. Jared did well with its Chosen by Jared diamond line and Pandora, he added. And he pledged that growth would soon return.
“The jewelry industry has been a consistent growth industry for over 20 years,” he said. “For those years, Signet has outpaced the industry.… All the research that we have done—and we have done some recent research into late November—[shows] consumers still find jewelry as a wonderful way of emotion and love, and they still hold the product in favor, including the millennials.”