Signet offsets tough trading with higher prices
27 August 2010 10:02
Strong demand for charm bracelets and a 12% increase in prices helped Ernest Jones and H Samuel parent Signet narrow UK sales declines in the second quarter, the group said today.
Signet Jewelers reported a 0.5% fall in like-for-like sales during the three months to 31st July in a marked improvement on the 4.3% plunge seen a year earlier.
The US-headquartered group, which also owns the Leslie Davis chain, saw a good performance from its recently introduced charm bracelet range.
Its average selling price also rose to £94 in the second quarter, having made a series of increases over the past year to help counter soaring costs of gold, unfavourable exchange rates and the end of the temporary VAT reduction in January.
But Signet said trading remained "challenging" in the UK, which accounts for around a fifth of annual group sales.
Profit margins are coming under pressure across its 548 UK shops and it expects this to continue into the second half and the next financial year.
Its US arm has fared better, with same store sales up 5.9% in the second quarter across Signet's American brands - led by Kay Jewelers and Jared the Galleria of Jewelry.
This helped offset the weaker UK performance, with cost cutting also aiding a 47.5% leap in second quarter net income to 40.7 million US dollars (£26.2 million).
Pre-tax income for the year to date has recovered by 72% to 92.7 million dollars (£60 million) after a tough first half in 2009.
Shares rose 3% after today's figures.
The bulk of Signet's stores are in America, where it has 1,345 stores.
In the UK, it has 345 H Samuel outlets and 203 Ernest Jones and Leslie Davis shops.
But the group plans to trim its retail estate in both the US and UK by 2% by the end of next January.
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