Leading jewellery retailer Signet has unveiled a comprehensive three-year transformation plan to reposition the company to be a share gaining omnichannel jewellery category leader.
Named the ‘Signet Path to Brilliance’, the three-year plan includes cost efficiencies, a portion of which will be reinvested in growth initiatives including e-commerce growth; omnichannel capabilities; and innovation in product assortment and the store experience.
Signet, which owns UK retailers H Samuel and Ernest Jones, believes this plan will enable the company to drive long-term sustainable, profitable sales growth and create value for shareholders.
Key components of the transformation plan include:
Optimising real estate footprint
Following an evaluation of its real estate footprint, utilisation, and cost structure, Signet intends to reposition its portfolio to drive greater store productivity. Efforts include development and implementation of innovative store concepts to improve the in-store shopping experience, execution of opportunistic store relocations and store closures to reduce the company’s mall-based exposure and exiting regional brands. Signet anticipates, pending the outcome of this evaluation, to close more than 200 stores by the end of Fiscal 2019. As approximately three-quarters of stores expected to close are within the same mall as another Signet banner, the company expects approximately 30 percent of revenue from closed stores to transfer to remaining Signet stores.
Reducing non-customer facing costs
In line with Signet’s goal of creating a ‘Culture of Agility and Efficiency’, the business is implementing initiatives across its operations, including strategic sourcing, distribution and warehousing, and corporate and support functions to drive cost savings and operational efficiencies. These include initiatives to reduce costs related to logistics, information technology, third-party contracts and corporate expenses.
Enhancing Signet’s ecommerce and omnichannel capabilities
Signet intends to invest in enhancing the customer experience across platforms and becoming the leading jewellery retailer across channels. New initiatives to drive increased digital traffic and improve conversion include using R2Net product image visualisation across banners, greater personalisation of content and product offering from enhanced behavioural data management, and enhancing digital marketing return on investment through greater visibility of a customer’s multi-touch journey. The company will also further expand and enhance its omnichannel wish list, bridal configurator, online appointment booking and local store online viewing capability. With these investments, Signet aims to grow its digital sales as a percentage of total revenues to at least 15% in fiscal year 2021, compared to 8% in fiscal year 2018.
Leading innovation and customer value
Signet has launched an ‘Innovation Engine’ and is investing further in data analytics and consumer insights, including a system to track customer net promoter score. The company is also addressing gaps in the customer value proposition. These investments are expected to result in improved product assortment and faster time to market, as well as greater marketing and promotional effectiveness.
Strengthening employee engagement and capabilities
Signet says its team and organisation will be key to accomplishing the its transformation goals. Signet has hired and promoted several executives to fill key leadership roles, is investing in building ecommerce, analytics and innovation resources and is focusing on reigniting employee engagement in the company’s store operations through training and development opportunities. The business will also provide a one-time special cash award to all hourly non-managerial team employees in fiscal 2019 to enhance employee commitment as it begins the transformation efforts, funded by US tax reform, as well as a three-year transformation incentive program for all employees.
The cost reductions have been carefully considered to ensure that Signet continues to invest for the future; drive long-term sustainable sales growth; and create shareholder value.
Together, the above actions actions are expected to deliver $200 million-$225million (£143m-£161m) of net cost savings over the next three fiscal years.