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Seattle--Continued weakness in the diamond engagement ring sector led to a 2 percent decline in overall sales for Blue Nile in the fourth quarter, traditionally the most robust period of the year for the jewelry industry.

The online retailer said Wednesday it plans to lower its prices again in an attempt to bolster sales in this category, despite just having executed a price decrease in January.

Blue Nile’s net sales for the quarter fell from $114.8 million to $112.3 million year-over-year. Gross profit declined 8 percent, from $25.3 million to $23.2 million.

Engagement ring sales in the United States totaled $56.2 million, down 6 percent from the year prior, with the retailer stating it is still experiencing “headwinds” from higher diamond prices.

Sales of non-engagement jewelry in the U.S. market climbed 2 percent, from $39.7 million to $40.4 million. A 10 percent increase in sales of non-diamond, non-engagement jewelry was offset by a decline in sales of non-engagement diamond jewelry.

“We’re obviously disappointed with our Q4 results,” Blue Nile Chairman of the Board Mark Vadon said in a conference call held Wednesday evening.

International sales were up 3 percent, from $15.3 million to $15.7 million. Slower sales in Canada and Europe were offset by 50 percent growth in the Asia-Pacific region, an area the company is targeting for future growth.

For the fiscal year ended Jan. 1, total sales increased 5 percent, from $332.9 million to $348.0 million. Gross profit climbed less than 1 percent, from $71.9 million to $72.1 million.

U.S engagement ring sales fell from $189.5 million to $186.2 million. Non-engagement jewelry sales were up, from $100.1 million to $105.9 million.

International sales grew 29 percent, from $43.3 million to $55.9 million.

Going forward, executives reiterated the e-tailer’s plan to place greater emphasis on the non-engagement sector of its business, particularly when it comes to marketing.
http://www.nationaljeweler.com/nj/majors/a/~27421-Blue-Nile-CEO-steps-down

When questioned about the plan to drop prices, executives said their business model has shown over the years that Blue Nile’s customers are extremely price sensitive. Past attempts to recoup margin by raising prices has negatively impacted sales, while lowering them has proven to revive sales.

Though executives would not directly answer when asked about the Valentine’s Day sales, they said the company’s guidance for the first quarter and full fiscal year indicates that they expect sales to increase, and the just-past holiday was factored in that guidance.