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Signet Jewelers sales tell a tale of two covid responses in the UK and United States

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The UK is living through the toughest lock down restrictions in the world, according to the Oxford Covid 19 Government Response Stringency Index, while the United States is close to the global average.

That might contribute to an explanation for the dramatic difference in performance for Signet Jewelers’ retail chains on both sides of the Atlantic.

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2020 will be a year most of us in the West will want to forget, but Signet Jewelers ended 2020 on a positive note with a 7% increase in holiday sales for the quarter ended January 30.

That still left group turnover almost 11% lighter with the full year (FY21) ending on $5.2 billion compared to $6.1 billion for the previous 12 months.

In the UK, which endured far tougher and longer lock down measures, brick and mortar sales at H. Samuel and Ernest Jones plunged by 56% for the holiday season quarter.

A rise of 115% in ecommerce sales took the edge off the bad news, but same store sales through all channels were down 28.3% for Q4.

Same store sales were flat for the fourth quarter in North America, but ecommerce rose by 66%, which contributed to an overall bump of 10.4% across all channels.

Average transaction value increased 1.1% and the number of transactions increased 9.9%.

For the full year to the end of January, North American same store all-channel sales fell 9.5%.

Ecommerce rose by 55.8% and brick and mortar declined 19.4%.

Looking ahead to the 2022 financial year, which began at the start of February, Signet expects stronger sales performance for the first six months as the vaccine roll out progresses, but cautions that there could be a shift of consumer discretionary spending away from the jewelry category toward experience-oriented categories.

“The magnitude and timing of which is difficult to predict,” the company suggests.

The aim is to grab as much share of pent up demand as possible as states unlock, so Signet is planning for increased marketing expenses to fuel momentum now and proactively influence shifts in consumer spending as the year progresses.

The company is planning to close over 100 stores by the end of this financial year, but will open up to 100 locations, primarily in highly efficient kiosks.

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