America’s two largest fine jewelry retailers-Zale Corp. and Sterling Inc.-reported healthy sales gains in their recently completed fiscal quarters. Comparable store gains, however, were disappointing.
Zale, which posted discouraging sales and earnings in the first half of its fiscal year, had a 13.9% gain in sales for its third quarter (ended April 30), according to unofficial results released May 10. The company rang up $411.5 million in sales, compared to $361.3 million for the same quarter last year.
Comparable store sales, though, declined as they had in the first and second quarters. Comp store sales were down 7.3%, compared to a 12.8% gain for the same time last year.
For the first three quarters overall, sales rose 15% (to $1.6 billion) compared to last year, but comp store sales fell 2.2%
Zale officials said in March that they expected comp store sales to decline or be flat for the rest of the fiscal year, following an unsuccessful marketing strategy that had emphasized promotions and lower-priced jewelry.
‘While a comparable stores sales decline [for the third quarter] is disappointing, it is consistent with our expectation,’ said Robert J. DiNicola, chairman and chief executive officer of Zale Corp. ‘Comparable store sales will continue to be challenging as we reposition our business for the long term.’
Zale is the world’s largest specialty retailer of fine jewelry, operating more than 2,300 retail locations in the United States, Canada, and Puerto Rico.
Sterling Inc.’s parent firm, the London-based Signet Group, released its first-quarter unofficial results (ended April 28) also on May 10. Group sales for Signet, which operates 1,606 retail jewelry stores in the United States and Great Britain, rose 23.1% to $452.9 million. Comparable store sales increased 3.4%
Most of that came from Sterling Inc., based in Akron, Ohio, whose sales comprise 74% of Signet’s total. Sterling reported $336.4 million in sales for the quarter. That includes $31.1 million from Marks & Morgan, then the ninth largest U.S. jeweler with 137 stores in the Southeast, which Sterling acquired on July 31. Overall, Sterling’s sales rose 17% for the quarter, and comp store sales remained almost flat with a 0.8% gain. (Marks & Morgan stores were excluded from the like-for-like comparisons for the first quarter.)
Terry Burman, group chief executive of Signet and chairman of Sterling, said the U.S. segment did well despite ‘trading condition [that] remain very challenging.’ February, helped by Valentine’s Day, was the quarter’s best month, he said, with March and April posting a weaker showing.
Signet’s British stores posted $116.5 million in sales, a 10.4% gain, and comp store sales rose 10.9%.
Signet, through Sterling, operates 1,004 stores in the United States under the name of Kay Jewelers, its national signature chain; Jared, its jewelry ‘superstores’; and several regional chains. In the United Kingdom, Signet operates 602 stores.