Jewellery group Signet, which owns H Samuel and Ernest Jones, last week unveiled a 29.1% profits plunge to $40m in its full year to February 2. Retail Week takes a closer look at the performance.

  • UK shoppers were looking for a bargain last year. Gross merchandise margin was down 120 basis points over the year as customers sought out promotions in what Signet said was a “challenging environment”. By contrast, customers at Signet’s US division, where it operates stores including Kay and Jared, bought higher-priced items with growth in the sale of coloured diamonds and upmarket watches.
  • The retailer closed 24 net stores across the UK last year as part of its strategy to focus on larger store formats in regional shopping centres. Both H.Samuel and Ernest Jones have not renewed leases which have come up for expiry in for stores in smaller markets. The jewellery group believes its strategy reflects “the customer’s changing shopping patterns away from stand-alone high street locations.”
  • The retailer had a slow Christmas in the UK. Like-for-likes dipped 1.7% in its fourth quarter to February 2 which the retailer said was down to “lower store traffic”. Inevitably promotions were used to woo customers into store and operating margin plunged 400 basis points to 18.2% over the quarter.
  • E-commerce gave Signet a much-needed boost in the UK, helping the jeweller increase online sales by $4.6 million, or 19.3% in the fiscal year, with sales reaching $28.4 million.
  • Unlike the UK, the US business is thriving. In contrast to the lacklustre results in Blighty, the US division’s operating profit soared 14.6% to $547.8m against a 7.9% sales jump to $3.27bn over the year. Like-for-like sales also increased 4%.

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