Signet Jewelers Sales Up 3.2%, Comps Up 2.4% in First Quarter

Signet Jewelers dominance of the U.S. jewelry market is undeniable. It is by far the largest and most diverse fine jewelry retailer in the U.S. To add to its U.S. success, the company also is the largest jewelry retailer in Canada and the U.K., with more than 3,600 stores in the three countries. 

However, it is in the U.S. where its dominance is the most formidable where it operates the three leading brands in various market categories:

* Kay Jewelers, which serves the mid market and is the largest specialty retail jewelry store in the US based on sales with more than 1,000 stores in 50 states;

* Zales, diamond jewelry specialists with more than 700 U.S. stores and 10 stores in Puerto Rico; and 

* Jared The Galleria Of Jewelry, upper-middle market jewelry retailer with more than 250 free-standing stores in 39 states. 

Signet’s strength was reinforced Thursday as the company reported that sales rose 3.2 percent to $1.58 billion and comparable store sales increased 2.4 percent, year-over-year, for the first quarter of fiscal 2017. More importantly for shareholders the company said diluted earnings per share grew a remarkable 26.4 percent and adjusted EPS grew an equally impressive 20.4 percent for the same period.

Signets results followed a disappointing earnings report from Tiffany & Co. a day earlier where the luxury jeweler saw total sales in the Americas fall by 9 percent to $403 million and comparable store sales declined 10 percent, year-over-year.

Mark Light, Signet Jewelers CEO, credits its promotions, tight operating margins and real estate management for the solid sales and earnings results at a time when the U.S. jewelry industry on the macro level continues to be choppy. 

“We gained profitable market share despite a challenging retail environment through strong sales of ‘Ever Us’ and other fashion jewelry collections as well as select branded bridal,” Light said. “Our 26 percent EPS growth was driven by higher same store sales and total sales along with solid expense management and synergies, leading to 190 basis points of operating margin expansion. In addition to delivering earnings results at the top end of our guided range, we achieved sales growth across real estate formats and in each of our divisions and our credit metrics showed strong sequential improvement.”

Signet’s dominant U.S. performance from its major brands hasn’t rubbed off on the handful of regional U.S. brands it owns and its Canadian operation. Its U.K. business showed improvement this quarter. Regardless, Signet's major U.S. brands account for approximately 83 percent of total sales for the company, so the drag from its smaller operations hasn’t had much of an effect on its bottom line. 

Other financial highlights for the first quarter of fiscal 2017 include: 

* Ecommerce sales increased 4.2 percent to $80.1 million, accounting for 5.1 percent of total sales. 

* Overall, average transaction value was higher and number of transactions was lower due to merchandise mix. 

* Comparable store sales for Sterling Jewelers (which includes Kay, Jared and regional brands) increased 2.3 percent, ATV increased 5.7 percent and the number of transactions decreased 5.6 percent. “This was driven principally by strong sales of select branded bridal jewelry as well as fashion jewelry and lower sales of Charmed Memories and low-priced promotional items, which tend to drive more transactions,” the company said. 

* Comparable store sales for Zale Jewelry (dominated primarily by Zales in the U.S. and several Canadian retail brands) increased 2 percent, ATV increased 5.8 percent, while the number of transactions decreased 3.7 percent. “This was driven primarily by strong sales of diamond fashion jewelry as well as branded bridal and lower sales of low-priced promotional items which tend to drive more transactions.” 

* Comparable store sales for Piercing Pagoda (its mall kiosk operation) increased 5.6 percent, ATV increased 13.7 percent, while the number of transactions decreased 6.9 percent. “The higher sales were driven principally by strong sales of gold chains and diamond jewelry. Transactions declined primarily due to fewer piercings.”

* Comparable store sales for Signet's UK jewelry operation increased 3.4 percent, ATV increased 4.3 percent and the number of transactions decreased 1 percent. “This was driven principally by strong sales of diamond jewelry and prestige watches. Transactions declined due primarily to beads and fashion watches.”

It has been two years since Signet closed the acquisition of Zale, its former biggest rival, and Light said the “integration continues to go extremely well across all aspects of our business. The synergies we expect to deliver this year will be mostly driven by operating expense savings as a result of the sound investments and strategic management of the integration over the past couple of years.”

He continued: “Learnings from our customer segmentation study and business results since the acquisition have validated our growth assumptions, and we have an enviable position with the three leading U.S. brands in a heavily fragmented and growing middle market jewelry industry.  We are pursuing the opportunity to grow square footage both near-term, driven principally by Kay, and medium-term driven more by Zales.” 

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Alex Soldier Jewels Available On 1stdibs

Alex Soldier Codi the Snail ring with diamonds and signature  open work

The work of jewelry designer, sculptor, and internationally recognized jewelry brand, Alex Soldier, is now available on 1stdibs.com. Handmade in New York City, the current selection features a mixture of his latest and classic jewels with price points starting at $1,300 retail. 

All of Alex Soldier's jewels feature his unmistakable aesthetic and signature proprietary metalwork, as seen on his famous Codi The Snail pieces that has its own following on Instagram under hashtag: #adventuresofcodithesnail. 

Since all of Soldier's pieces tend to be one-of-a-kind or limited edition, the selection will be updated regularly with new colors and styles. 1stdibs.com is an online marketplace for collectibles and newer rare items in several categories, including home décor, vintage fashion, jewelry and watches. 

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More than 8,000 Attend China Gold, Jewelry, Gem Fair

The 14th edition of the China International Gold, Jewellery & Gem Fair – Shenzhen attracted 8,683 local and overseas visitors during the show’s three-day run, ended April 22. They viewed and purchased products from 332 exhibitors from around the world in 20,000 square meters of exhibition space from 13 countries, including China, Hong Kong, India and Korea.

The number of visitors from overseas and Hong Kong region is 741 this year. The top 10 sources of buyers (excluding mainland China and Hong Kong region) were India, followed by Taiwan region, the United States, Russian Federation, Malaysia, Ukraine, Thailand, Korea; Pakistan, Singapore and Iran claimed ninth, and Australia.

Mainland Chinese visitors totaled 7,942 from 30 provinces, autonomous regions and municipalities of mainland China. The top 5 sources of local visitors were Guangdong, followed by Zhejiang, both Shanghai and Fujian claimed third, both Jiangsu and Shandong claimed forth, while Beijing ranked fifth.

The fair featured the third edition of the China Jewellery Market Summit, co-organized by the Shenzhen Fair and CJNA. It was divided into two main parts: a jewelry parade showcasing jewelry from a select group of exhibitors, and a panel discussion that featured speakers from four leading jewelry brands who shared their views on the latest developments in mainland China’s jewelry market; and how the retailers could tap new business opportunities through innovative thinking.

“The China jewelry retail market has been experiencing a lot of changes in recent years. It is slowing down after years of rapid growth,” Joe Ho, fair manager, China – Jewellery Fairs of UBM Asia. “The summit was a good venue to help local retailers understand the changes and hear about solutions to the challenges.” 

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Tiffany's Global Net Sales Down 7%, Comps Down 9%

Tiffany & Co. on Wednesday reported that worldwide net sales declined 7 percent to $891 million and comparable store sales declined 9%, year-over-year, for the first quarter of 2016. Sales declined in all regions except Japan, which the luxury jeweler attributes to “a continuation of softness in spending by both local customers and foreign tourists.”

Net earnings were also lower than the prior year resulting from a decline in the operating margin, as improved gross margin was more than offset by a lack of sales leverage on operating expenses, the New York-based company said

On a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars, worldwide net sales declined 7 percent, and comparable store sales declined 9 percent.

Net earnings fell 17 percent year-over-year to $87 million. 

“As expected, this was a difficult quarter in terms of both sales and earnings growth,” said Frederic Cumenal, Tiffany & Co. CEO. “We faced numerous challenges, including continued pressure from foreign tourist spending in Europe, the U.S. and Asia, particularly in Hong Kong.”

Net sales by region in the first quarter are as follows:

In the Americas, total sales fell 9 percent to $403 million and comparable store sales declined 10 percent, year-over-year. On a constant-exchange-rate basis total sales and comparable store sales declined 8 percent and 9 percent, respectively, due to “varying degrees of softness in spending by U.S. customers and foreign tourists.”

In the Asia-Pacific region, total sales fell 8 percent to $238 million and comparable store sales declined 15 percent, year-over-year. On a constant-exchange-rate basis total sales and comparable store sales declined 5 percent and 12 percent, respectively. The company said total sales growth in China and Korea was offset “by a continued significant decline in Hong Kong and more moderate declines in other markets.”

In Japan, total sales of $131 million were 8 percent above the prior year and comparable store sales increased 12 percent, year-over-year. On a constant-exchange-rate basis total sales and comparable store sales rose 1 percent and 5 percent, respectively. Management attributed the sales growth to higher spending by local customers.

In Europe, total sales fell 9 percent to $97 million and comparable store sales declined 15 percent, year-over-year. On a constant-exchange-rate basis total sales and comparable store sales declined 7 percent and 14 percent, respectively, “due to softness in most countries, led by France, attributed largely to lower foreign tourist spending.”

Other sales declined 30 percent to $22 million, and comparable store sales declined 21 percent, reflecting lower retail sales in the United Arab Emirates and wholesale sales in other markets.

Tiffany updated its full year earnings forecast and now expects a decline by a mid-single-digit percentage from 2015’s adjusted earnings per diluted share. 

Tiffany opened two company-operated stores in the first quarter (in Europe) and closed one location (in Japan). As of April 30, the company operated 308 stores (124 in the Americas, 81 in Asia-Pacific, 55 in Japan, 43 in Europe, and five in the UAE), compared with 298 stores a year ago (123 in the Americas, 75 in Asia-Pacific, 56 in Japan, 39 in Europe, and five in the UAE).

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$29 Million Estimate For 24-Carat Blue Diamond At Christie’s

It’s just another jewelry auction that features another superb blue diamond.

This time it’s the “Cullinan Dream,” the largest fancy intense blue diamond ever offered at auction. It is the lead item at Christie’s New York Magnificent Jewels sale on June 9 with an estimate of $23 - $29 million.

The 24.18-carat cut-cornered rectangular mixed-cut gem is set on a platinum ring flanked with classic baguette-cut diamonds. It is nearly 10 carats larger than the “Oppenheimer Blue,” which sold for a world auction record of $57.5 million and is currently the largest blue diamond ever sold at auction.

The Cullinan Dream has a VS2 clarity grade (very slightly included with inclusions observed with effort under 10x magnification), two grades below flawless.

The Cullinan Dream is the largest of four blue diamonds cut from a 122.52-carat rough diamond discovered in 2014 at the legendary Cullinan mine, famous for yielding the 530.20 Cullinan I, the largest polished white diamond in existence and is part of the British Crown Jewels housed in the Tower of London.

In recent years, the Cullinan mine has been associated with some of the most significant blue and pink diamonds to come to market, including the 10.1-carat “De Beers Millennium Jewel 4,” that sold for $31.8 million at Sotheby’s Hong Kong in Spril; and the 12.03-carat “Blue Moon” that sold for $48.4 million at Sotheby’s Geneva in November 2015, the second largest amount ever for a diamond at auction.

The Cullinan Dream is the top item in the 260 lots on offer at Christie’s New York sale. It includes fancy colored and colorless diamonds; colored gemstones; natural pearls; and signed jewels from Buccellati, Bulgari, Cartier, David Webb, Graff, Tiffany & Co. and Van Cleef & Arpels. 

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‘Oppenheimer Blue’ Diamond Sells For $57.5 Million, Sets World Auction Record

It took only six months for a second blue diamond to sell for a world auction record. And it wasn't even close.

The 14.62-carat “Oppenheimer Blue” sold for more than $57.5 million (including commission and fees), smashing the previous record for the 12.03-carat “Blue Moon of Josephine,” which sold in November 2015 for $48.4 million. The auction house originally listed the price, converted from Swiss francs to U.S. dollars, as $58.2 million.

Its hammer price (not including commission and fees) was approximately $51.3 million.

The rectangular-shaped gem, the largest fancy vivid blue diamond ever offered at auction, had a high estimate of $46.1 million. It was the lead item at Christie’s Geneva Magnificent Jewels sale Wednesday, which is still ongoing.

Bidding for the gem, led by Rahul Kadakia, Christie's international head of jewelry, started at 30 million Swiss francs and went agonizingly slow (approximately 30 minutes), with long silent pauses, nervous laughter, incremental bidding at 200,000 Swiss francs and applause after each million-franc milestone, as viewed through the auction house live stream.

Kadakia was happy to accept all bids no matter how small saying, “once in a lifetime we have a stone like this we have to take all bids.”

The bidders eventually dwindled down to two phone buyers who traded bids for about 10 minutes before Kadakia ended it. 

The diamond is set in a platinum ring flanked on either side by a trapeze-shaped diamond. Its VVS1 clarity grade is one step below Internally Flawless. The diamond was originally set in a "Five Blades" mounting by Verdura

A photograph of the Oppenheimer Blue in its original Verdura “Eight Blades” mounting. Photo courtesy of Verdura

The diamond was previously owned by Sir Philip Oppenheimer, a member of the family that once controlled the De Beers Mining Company. He is credited with serving for 45 years as chairman of the Central Selling Organization, the sales cartel set up by De Beers to keep strict control over the diamond supply worldwide. Today he is remembered as the architect of creating stability in the international diamond chain and for his incomparable gem collection, which includes the Oppenheimer Blue.

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‘Unique Pink’ Sells For Record $31.5 Million At Sotheby’s

A 15.38-carat fancy vivid pink diamond sold for more than $31.5 million at Sotheby’s sale of Magnificent Jewels and Noble Jewels in Geneva Tuesday, setting a record for a stone of its type. 

Called the “Unique Pink,” it achieved more than $2 million per carat. It is the largest fancy vivid pink diamond ever to come to auction.

It was sold by phone to a private Asian buyer, according to a source who requested anonymity. The buyer doesn’t appear to be Joseph Lau, the Hong Kong billionaire who has gained a reputation for paying exuberant sums at auction for diamonds and gems for his daughters, including the “Blue Moon, which set a world auction records for any diamond, gem or jewel. 

“It is difficult to imagine a diamond that better illustrates the term Vivid Pink than this outstanding stone,” David Bennett, worldwide chairman of Sotheby’s International Jewellery Division, said in a statement. “The color is simply astonishing and, for its size, it is in my experience truly unique.” 

The gem was sold by Cora International, a New York-based company that specializes in cutting and polishing rare important diamonds, including the Blue Moon. 

“Pink diamonds are among the rarest in the world and they are increasingly being viewed as an investment, said Ehud Laniado, Cora International chairman. “Diamonds are beautiful and a treasure of nature, but more than this, they offer an economy of rarity that is making them increasingly attractive to savvy investors.”

It was the top lot of a sale that set a world record for any jewelry auction, achieving more than $175 million with 83 percent of items sold by lot and with 70 percent of lots sold above high estimate. Three lots sold for more than $10 million and six lots for more than $5 million.

In addition the auction set a new record for an online purchase during a live auction with the sale of a pear shaped fancy blue and fancy orangy pink diamond earrings that sold for nearly $6 million, double its high estimate. 

Other records set at the auction held at the Hôtel Beau-Rivage are:

* An Alexandra Reza brooch featuring a 6.64-carat fancy intense blue diamond sold for more than 13.6 million, setting an auction record for a jewel sold by the famed Parisian designer. 

* An 18.51-carat fancy pink diamond pendant sold for more than $9.7 million ($528,021 per carat), setting an auction record for a fancy pink diamond.

* An 8.2-carat fancy purplish pink diamond ring sold for nearly$3.7 ($450,744 per carat), setting a record for a diamond of this color. 

There was a year-over-year 41 percent increase in the number of items sold online. In addition, the sale attracted bidders from 45 countries with 25 percent of bidders from Asia. 

Later today will be the sale of the 14.56-carat “Oppenheimer Blue,” the largest and finest fancy vivid blue diamond ever offered at auction at Christie’s Geneva Magnificent Jewels sale at the Four Seasons Hotel des Bergues. If the results of Tuesday’s auction are any indication, it will have a chance to eclipse the “Blue Moon.”

The first of two sessions of the auction is underway and so far sales are brisk with several items selling above the high estimate. 

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