Signet Jewelers, Operator of Kay Jewelers Reports Slow Store Sales

Source: Kay Jewelers

Signet Jewelers is the world’s largest retailer of diamond jewelry with over 3,600 stores and $6.4 billion in sales.

In a Holiday Season “Results of Operations and Financial Condition” Form 8-K filing, the company revealed same-store sales decreased 5.3 percent over the holiday sales period.

You may know Signet Jewelers under one of these well-known mall and high-street brands:

  • Kay Jewelers
  • Zales
  • Jared The Galleria Of Jewelry
  • H.Samuel
  • Ernest Jones
  • Peoples
  • Piercing Pagoda
  • Belden Jewelers (R)
  • Goodman Jewelers (R)
  • Osterman Jewelers (R)
  • Gordon’s Jewelers (R)
  • JB Robinson Jewelers (R)
  • LeRoy’s Jewelers (R)
  • Mappins (R)
  • Marks & Morgan Jewelers (R)
  • Rogers Jewelers (R)
  • Shaw’s Jewelers (R)
  • Weisfield Jewelers (R)
Source: Signet Jewelers – Click on Chart to see full details.

Regional brands, marked with (R) in the above list, took the largest hit with 29.1 percent decline, while the U.K. Jewelry division experienced a 10.3 percent decline.

The Kay Jewelers division, which accounts for about 40 percent of total revenue of Signet Jewelers, saw same-store sales decrease by 10.8 percent.

Apparently this year “Every Kiss Begins with Kay” didn’t drive foot traffic to the Kay stores and more men bought online instead.

eCommerce Up Huge!

But eCommerce helped the company maintain overall sales and Signet Jewelers reported online sales growth of 48 percent with most coming from enhancements to the Sterling websites and continuing double-digit growth at R2Net.

Store Closings?

Before 2017, the company bucked the trend of store closings experienced by other mall retailers and according to its financial reports, from 2015 to 2017 actually increased its total store count by 110 stores.

Signet Jewelers operated 1,094 Kay Jewelers stores in 2015 and grew that number to 1,192 over the next two years. Kay appeared to be the driving force behind the store count increase.

But with Kay Jewelers same-store sales taking such a hit this season, one has to wonder how long they can justify keeping that many stores open? Clearly the mall traffic is not the same.

The company already adjusted Net selling square footage growth for all its brands from -1.0% to 0% to an updated guidance in the Holiday Season report of approximately -1.5%. That seems to indicate store closures!

During the investor conference call discussing the Holiday Season sales report, CEO Gina Drosos was asked about future store closings.

“In terms of store count, we continue to look at traffic in the malls which were challenged again over the holiday season. And so, we continue to look at where our most profitable stores across our total line and make sure that we’re operating in the right places in the right malls.”

Gina Drosos, CEO Signet Jewelers

Not any exact numbers, but obviously the company is reviewing sales data to trim store counts in malls with light foot traffic.

We already saw with Walmart yesterday decreasing store counts of Sam’s Clubs by about 10 percent, that even companies with strong overall financials face the reality of making adjustments to eCommerce growth.

Signet Jewelers appears to have an eCommerce strategy that is showing promise.

But as major chain stores such as these jewelry stores start to depart from malls, it will continue to reduce foot traffic and that will impact other retailers. It is a vicious cycle that will see no end in 2018.

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