Ernest Jones and H Samuel suffer sales slump in Q2

SIGNET_ernestjonesshop.jpg

Signet Jewelers has reported a positive second quarter performance overall, however its UK Division, which consists of Ernest Jones and H Samuel, posted a dip in sales.

Reporting its results for the 13 weeks ended July 29, 2017, same store sales in the UK fell by 3.4% compared to the same period last year, with H Samuel and Ernest Jones declining by 3.6% and 3.1% respectively.

In the first quarter of the year H Samuel posted sales of $62.2m (£48m), while Ernest Jones had slightly higher results at $69.7m (£54m). Total sales for the UK Division fell by 9.2% to $131.9m (£102.8) overall.

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Throughout Q2, ATV increased by 14.4% in the UK, while the number of transactions decreased by 15.5%. The company says the decline in same store sales was driven principally by fewer transactions in relatively lower-priced fashion jewellery, with strong sales of prestige watches driving ATV higher.

Same store sales for Signet's UK Division dipped in Q2.

Same store sales for Signet’s UK Division dipped in Q2.

Gross margin dollars in the UK jewelery division decreased by $3.7m (£2.8m) and the gross margin rate decreased 30 basis points driven principally by greater promotional activity and de-leverage on store occupancy.

Globally, overall sales for Signet were better than the same time last year, as the company reports a 1.9% spike to  $1,399.6 million (£1,090.7m). Same store sales were up 1.4% overall compared to a slump of 2.5% in the prior year.

Signet says growth was driven by eCommerce platform improvements, Mother’s Day performance and timing, effective marketing and bridal promotion initiatives.

Signet’s recently appointed chief executive officer, Virginia C. Drosos, comments: “Our encouraging second quarter performance reflects Signet’s fundamental competitive strengths and the progress we are making on our strategic priorities. We delivered positive same store sales performance and managed our cost base to deliver operating margin expansion in a highly promotional environment.”

“Further, today we announced the acquisition of JamesAllen.com to add a leading, fast-growing online jeweler to our portfolio. The acquisition will enhance our innovation and digital capabilities with R2Net’s technology to create a best-in-class OmniChannel shopping experience across our banners. Based on this positive momentum, we are increasingly confident that Signet is well-positioned for the upcoming holiday selling season and on track to achieve our financial targets for the year.”

She concludes: “I am stepping into the CEO role at an exciting time for Signet. Together with my leadership team, I am acutely focused on deepening our understanding of consumers, reinventing our OmniChannel shopping experience, and elevating our brand messaging and product assortment.”

eCommerce sales in the second quarter were $82.2 million (£64m), up $12.6 million (£98.2m) or 18.1%, compared to $69.6 million (£54.2m) in Q2 2017.

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