CEO Mike Barnes concedes that heavy discounting impacted margins.
A festive trading update from Signet Group shows that the UK division bettered 2012’s figures over the 2013 Christmas shopping period, with online sales proving more important than ever but promotional discounting hitting margins.
Same store sales in the UK for the eight weeks to December 28 were up 5.2% year on year, beating the US division’s 4.9% rise. Total sales in the UK were up 6.6% to of US$203.6 million (£124.1m).
Ernest Jones delivered the strongest year-on-year performance with sales up 8%, but H Samuel also delivered an uplift on the previous year with sales up 3.3% at the chain.
Sales through Signet’s UK e-commerce channels showed a strong improvement on last year with sales up 37.5% over the period, suggesting that more shoppers bought festive gifts online this year.
Total global same store sales at Signet Group for the period were up 5%. Combined total sales at the UK and US divisions hit US$1.28 billion (£780m) over the eight-week period, up 7.7% on 2012.
Despite the solid rises over the festive period, the retail group did indulge in heavy discounting to get the sales ringing through the tills, something that it admits led to lower than expected margins.
Signet Group chief executive Mike Barnes said: "We were pleased to deliver 5% same store sales for the holiday season and were especially encouraged by both the improvement in the UK division and the strength of our e-commerce sales across divisions. I would like to thank the US and UK teams very much for their dedication, hard work and execution of our exciting merchandise programs during the holiday selling period.
"The US holiday season was highlighted by a strong November and a strong finish to December. Overall, we expect fourth quarter same store sales to be within our guidance. However, additional discounting was necessary in a highly promotional retail environment that included challenging customer traffic trends and lower than anticipated commodity cost savings. We believe these factors will result in lower than expected gross margins and profitability versus our original expectations."