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Friday, January 10, 2014

2013 Holiday Sales Mostly Positive at Tiffany, Signet, Zale Corp.

The three largest jewelry retailers performed well enough during what was described as a challenging holiday sales period. 

Signet Jewelers, Tiffany & Co. and Zale Corp. experienced a November-December sales period that saw more competition for fewer shoppers. However, each company employed strategies that allowed them to make the most of the holiday season. 

Signet Jewelers
The largest specialty retailer in the US and UK, said that its US sales increased 7.9 percent year-over-year for the eight-week period ended December 28 to $1.07 billion. Same store sales for the period rose by 4.9 percent. However, the company did note that “additional discounting was necessary” in a competitive environment.

Sales at Kay Jewelers and Jared The Galleria Of Jewelry, its largest retail chains, rose 8.9 percent to $674.8 and 11.6 percent to $312.5 million, respectively, while sales at its regional brands fell 9.2 percent to $85.4 million.

Same store sales at Kay and Jared both increased 5.6 percent, while its regional brand holdings fell 2.3 percent for the period. 

“The US holiday season was highlighted by a strong November and a strong finish to December,” said Mike Barnes, Signet CEO. “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.”

In Signet’s UK division, which accounts for 19 percent of the company’s total revenues, sales for the eight-week holiday period increased 6.6 percent to $203.6 million year-over-year. Same store sales in the UK were up 5.2 percent.

Overall sales for Signet Jewelers In the eight-week period ended December 28, increased 7.7 percent to $1.27 billion. Same store sales increased 5 percent “driven by balanced strength across a variety of brands and categories.” 

Signet operates more than 1,400 stores in the US and 500 stores in the UK.

In addition, consolidated eCommerce sales increased 27.2 percent for the period, with a 24.8 percent increase in the US and a 37.5 percent increase in the UK.

Tiffany & Co.
The international luxury retail jeweler said Friday that total sales in the Americas region (which largely reflects US sales) rose 6 percent to $550 million for the holiday period ended December 31. On a constant-exchange-rate basis, total sales increased 7 percent while same store sales rose 7 percent due to what the company describes as “broad-based sales growth across most of the region.” The company operates 121 stores in the Americas.

The company reported that worldwide net sales for the period rose 4 percent to $1.03 billion. On a constant-exchange-rate basis worldwide net sales increased 8 percent due to growth in all regions. Same store sales increased 6 percent. 

“Tiffany enjoyed a good holiday season with overall sales results in line with our expectation, and we were pleased to see growth across our fine and statement, engagement and fashion jewelry categories,” said Michael J. Kowalski, Tiffany chairman and CEO.

Zale Corp.
Meanwhile, Zale Corp. reported same store sales for the holiday period increased 2 percent at constant exchange rates, or 0.7 percent on a US dollar reported basis led by a 3.5 percent rise in US same-store sales. 

Overall, the specialty retailer reported a 2 percent drop in holiday sales to $556 million, saying it is due to a closing of 91 stores during the year and a decline in the Canadian exchange rate. 

The Dallas-based company currently operates 1,064 fine jewelry stores and 630 kiosks in the United States, Canada and Puerto Rico, with the US being, by far, its largest market. 

The company’s US fine jewelry brands, consisting of Zales Jewelers, Zales Outlet and Gordon’s Jewelers, posted a same store sales increase of 3.5 percent. This increase follows a 2.2 percent rise in the same period last year.

Canadian fine jewelry brands, consisting of Peoples Jewellers and Mappins Jewellers, posted a same store sales increase of 0.5 percent at constant exchange rates, following a decline of 0.7 percent in the same period last year. On a US dollar reported basis, same store sales decreased 5.9 percent, following a 2.7 percent increase in the same period last year.

Piercing Pagoda, Zale Corp.’s kiosk jewelry business, posted a same store sales decline of 5.1 percent. In the same period last year, same store sales rose 1.7 percent.

“During the holiday period, we maintained our focus on increasing exclusive product penetration, driving gross margin improvement and building our core national brands,” said Theo Killion, Zale Corp. CEO. “We executed a solid holiday season despite a challenging retail environment.”

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