Jan 12, 2017

Signet Reports 4.6% Decline in 2016 Holiday Sales, Sterling E-commerce Under Performs

Announcing the results of a disappointing holiday season, Signet Jewelers Limited, the world's largest retailer of diamond jewellery said that same store sales had decreased by 4.6% in the nine weeks ended December31, 2016 compared to an increase of 5.1% during the corresponding period a year earlier.

Total sales at $1,940.9 million were down by $104.2 million or 5.1% as compared to an increase of 5.3% in the prior year, the retailer noted, adding that the decline was driven principally by underperformance in its Sterling division e-commerce business. In constant currency terms, sales decreased 3.3% compared to an increase of 6.6% in the prior year.

Sterling said that merchandise categories and collections were broadly lower most notably in the mall and e-commerce selling channels, while select merchandise and other selling channels performed relatively well such as diamond fashion jewellery, bracelets, earrings, Ever Us, Vera Wang Love, and the off-mall and kiosk selling channels.

Overall, the e-commerce sales too at $142.5 million, were down $3.5 million or 2.4% compared to $146.0 million in the prior year, Signet said. This was due principally to the underperformance of recent enhancements to e-commerce systems across all Sterling Jewelers division store banners, which use a common platform. These enhancements, implemented early in 2016, performed poorly when exposed to high holiday volume resulting in customer communications issues and purchasing disruptions.

Mark Light, Chief Executive Officer, said, “A preliminary view of market data suggests that the jewelry category was broadly flat to modestly down with in-store sales down mid-single-digits and e-commerce sales up double-digits. Signet’s in-store results were in-line with the jewelry market, but technical performance issues in Sterling’s e-commerce platform largely led to Signet’s lower-than-expected results.”