WHITELOGO

Blog

Focus on

the diamond market

A mall-based jewelry store of Kay Jewelers, one of the eight brands under which Signet Jewelers trades.

WORLD’S LARGEST JEWELRY RETAILER REPORTS SPECTACULAR GROWTH DURING FIRST QUARTER OF 2021

Signet Jewelers, the world’s largest retailer of diamond jewelry, has announced what only could be described as spectacular results for the 13 weeks ended May 1, 2021. According to the company, sales at its brick and mortar stores were up almost 106 percent, while ecommerce growth increased by more than 110 percent.

Signet, which is mainly active in the United States, Canada and United Kingdom, operates approximately 2,800 stores under the brands of Kay Jewelers, Zales, Jared, H.Samuel, Ernest Jones, Peoples, Piercing Pagoda, and JamesAllen.com.

Total sales by the group equaled $1.7 billion, up 98.2 percent year over year. eCommerce sales totaled $346.3 million.

“We delivered strong performance across our portfolio,” said said Virginia C. Drosos, the company’s CEO. “While the jewelry category is experiencing meaningful growth, we are outpacing market growth and gaining share consistent with our Inspiring Brilliance strategy.”

The strategy she referred to is a multi-faceted plan designed to grow Signet’s market share in the United States, which currently stands at about 6 percent, to about 10 percent. All told that would transform the company into a $9 billion annual business.

A STRONG SHIFT TO COMMERCE

Growth in the ecommerce arena was a key element in Signet growth strategy, and it represents a dramatic turnaround for the company that many considered to be struggling in this department.

Drosos admitted as much in a recent interview on CNBC’s Mad Money show, when she said that at first the goal had been to triple its ecommerce sales so that they would achieve the industry average of 15 percent of total business, but they ended up getting close to 20 percent.

Signet began the turnround, by first purchases the Israel-headquartered James Allen brand, and then Rocksbox, a San Francisco jewelry subscription service that lets customers sample and possibly buy items for a monthly fee.

The COVID epidemic played a significant role in the company’s success in restructuring itself as a digital juggernaut.

In addition to 700 online sales staff, it introduced virtual consultations where customers can communicate via text, voice or video to ask questions. Using technology developed in Israel, enhanced its photographic techniques so buyers can blow up the diamond 40 times its real size to see the diamond’s cut or check for imperfections.

It also added visual search, allowing users to upload photographs of jewelry that they like to find product that are similar online.

“While the jewelry category is experiencing meaningful growth, we are outpacing market growth and gaining share consistent with our Inspiring Brilliance strategy,” says Virginia Drosos, Signet’s CEO.

The eCommerce offering by Zales, one of the most prominent brands in the Signet stable.

COMPETITION FROM EXPERIENCE-ORIENTED LUXURY EXPECTED

Signet expects stronger sales performance in the first half of the fiscal year.  However, at the same time, as the vaccine rollout matures, it believes there will be a shift of consumer discretionary spending away from the jewelry category toward experience-oriented categories, like travel and vacations, but the magnitude and timing of this shift is difficult to predict.

As such, the company is planning for increased marketing expenses to continue to proactively manage against shifts in consumer spending as the year progresses.

“We are entering this next phase of Signet’s transformation from a position of financial strength,” said Joan Hilson, Signet’s Chief Financial and Strategy Officer.  We are continuing to increase liquidity with ongoing cash, cost and inventory discipline, enabling accelerated investment in innovation and growth.”

“Even as we expect some current tailwinds from stimulus and slower than anticipated return to travel and experience spending to subside in the back-half of 2021, we are confident in our ability to deliver strong shareholder return and generate cash,” she added.

SEARCH DIAMONDS
Search