Signet UK sales dip in Q1 despite strong sales of prestige watches

Ernest Jones store

UK Jewelry, the division of Signet Jewelers responsible for H.Samuel and Ernest Jones in the UK, has reported a same store sales drop of 3.5% for the first quarter of its 2018 financial year.

Prices have been rising across the UK operation, with average transaction values increasing by 12.4%.

However, the number of transactions decreased by 14.4% compared to the same period a year ago.

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“The SSS decline was driven principally by lower sales of jewellery offset by higher sales of watches. Strong sales of prestige watches drove average transaction value,” the company said in a trading statement.

H.Samuel performed worse than the more upmarket Ernest Jones network. Same store sales at H.Samuel dropped by 5.6% in Q1 to $60.6 million, while Ernest Jones dipped by 1.5% to $61.9 million.

The UK business recorded a loss for the first quarter of $2.5 million. This compared to a profit for the same quarter last year of $1.3 million.

Watches accounted for 33% of sales for Signet's UK retailers FY17, which ended in January this year.

Watches accounted for 32% of sales for Signet’s UK retailers FY17, which ended in January this year.

Gross margin dollars in the UK Jewelry division decreased by $9.5 million. The gross margin rate decreased 310 basis points driven principally by lower sales which deleveraged fixed costs such as store occupancy and lower gross merchandise margin rate, the company described.

The number of stores for Ernest Jones and H.Samuel is virtually unchanged at 204 and 304 respectively.

“We continue to take decisive action to adapt our business to the current challenging retail environment and to position our company for long-term growth. Importantly, during the quarter, we made significant improvements to our online platforms and continued to accelerate our digital marketing efforts which resulted in a measurable sequential improvement in our e-commerce performance. We also made important changes to our organizational structure and strengthened our team to drive our 2020 Strategic Vision and deliver operational efficiencies,” said Mark Light, chief executive officer of Signet Jewelers.

  • Learn more about the performance and plans of Signet Jewelers in the June edition of WatchPro, which has an exclusive interview with Seb Hobbs, president and chief customer officer for the group.

 

 

 

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