Signet UK annual sales decline 0.8%

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Q4 2012 sales increase 1.8% as bridal and fashion jewels prove strong.

By Hallie Engel

Signet Jewelers has today announced its results for Q4 2012 and the 52 weeks to February 2 2013, with its UK division total annual sales falling 0.8% to $709.5 million (£468m), down $5.6 million (£3.7m) compared to 2012.

The company, which owns and operates H Samuel, Ernest Jones and Leslie Davis stores in the UK, achieved combined UK and US sales totalling $3.98 billion (£2.63bn), up $234.2 million (£154.6m) or 6.2% compared to $3.75 billion (£2.47bn) in the 52 weeks ended January 28 2012.

In the UK, fiscal 2013 sales totalled $709.5 million (£468.6 million), a decrease from $715.1 million (£472.257) compared to fiscal 2012 – a decline of $5.6 million (£3.7 million), or 0.8%. 

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Its Q4 sales increased by 1.8% to $268.4 million (£177.2 million), though same store sales decreased 1.9%, compared to Q4 2012’s increase of 1.7%.

Its UK sales performance was primarily attributed to lower store traffic and increased purchases of promotional merchandise, impacting sales and gross margin.

Signet’s UK division experienced sales growth primarily in branded fashion jewellery and bridal jewellery.

Fashion watches and prestige watch sales grew, excluding Rolex, which Signet said it is offering in fewer UK stores. This decreased availability of Rolex particularly impacted the average merchandise transaction value in Ernest Jones.

The group’s UK operating income for the 52 weeks totalled $48.8 million (£32.2m), a decrease of $9.7 million (£6.4 million) or 16.6%.

Gross margin dollars in the UK decreased $14.1 million (£9.3 million) compared to fiscal 2012, reflecting lower sales and a gross margin rate decrease of 170 basis points.

Signet said this was primarily a result of a decrease in the gross merchandise margin rate of 120 basis points caused by customers’ preference for promotional merchandise in a challenging environment.

In terms of store openings and closures, the group closed 24 stores in the UK in fiscal 2013, with a total 511 store as of February 2 2013.

Mike Barnes, chief executive of Signet, said: “Signet had an excellent fiscal 2013 with a 3.3% increase in same store sales and a 16.6% increase in earnings per share.

"Creating an outstanding customer experience, delivering compelling merchandise, heightening awareness through our continued advertising investment in support of our store concepts and merchandise brands.

"We are pleased with our progress quarter-to-date and expect to achieve our goals for the first quarter. Our priorities remain focused on building outstanding relationships and loyalty, as we provide customers with outstanding service and differentiated and compelling assortments and brands. We will continue to advance our expansion goals as we integrate our recently acquired Ultra stores, execute on our multi-channel growth initiatives and expand our store base. We remain confident in achieving our Fiscal 2014 goals and making significant progress toward our long-term objectives."

Signet has forecast growth and increased sales in the year ahead, with planned capital spending for fiscal 2014 of about $180 million to $195 million (£122 to £128 million).

The capital spending will be used to support new stores, remodelling, and multi-channel and IT infrastructure investment. In the US, Signet also anticipates opening 65 to 75 new stores for the year.
 

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