Signet Jewelers, which owns H Samuel and Ernest Jones, has reported a tough start to the year with total sales of its UK division down by 14.9% year on year to $122.5m (£95.2m).
Reporting its results for the 13 weeks ended April 19, 2017, same store sales in the UK dipped by 3.5% compared to the same period last year, with H Samuel and Ernest Jones declining by 5.6% and 1.5% respectively.
In the first quarter of the year H Samuel posted sales of $60.6m (£47m), while Ernest Jones had slightly higher results at $61.9m (£48m).
Gross margin dollars in the UK jewelery division decreased by $9.5m (£7.37m) and 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.
Globally, overall sales for Signet were disappointing, as the company reports a 11.1% dip on the prior year to $1.4bn (£1bn).
Same store sales were down by 11.5%, with Signet highlighting that the timing of Mother’s Day in the US this year unfavourable.
Chief executive for Signet Jewelers, Mark Light, comments: ““As anticipated, we had a very slow start to the year as continued headwinds in the overall retail environment were exacerbated by a slowdown in jewellery spending and company specific challenges. However, Signet’s Q1 same store sales improved sequentially, when normalised for Mother’s Day, and we were pleased with the holiday’s results.
“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.”
Signet also made changes to its organisational structure and strengthened its team to drive the company’s 2020 strategic vision.
Based on the progress the company has achieved to date on its ‘Customer-First Omni-Channel’ strategy and with a number of initiatives underway, Signet expects Fiscal 2018 results to be within its previously-announced guidance range.
Light adds: “In addition, today we announced the phased, strategic outsourcing of our credit portfolio through a structure that is designed to not only enable us to maintain our competitive credit offering and sales, but to also allow us to further increase our operational focus on the growth of our retail platforms.”