Signet to Close 150 More Stores This Fiscal Year

MajorsApr 05, 2019

Signet to Close 150 More Stores This Fiscal Year

Mall stores and regional banners likely will be first on the chopping block.

Signet’s same-store sales slipped 2 percent in its fourth quarter with online outperforming in-store sales.

Akron, Ohio—Signet Jewelers Ltd. plans to shutter 100-plus stores this fiscal year as it continues along its “Path to Brilliance,” the retailer’s three-year turnaround plan.

The company reported lackluster fourth quarter results Wednesday, weighed down by a weak holiday season and faltering demand for its legacy merchandise.

Quarterly revenue fell 6 percent while same-store sales were down 2 percent.

The retailer’s e-commerce segment, however, was one of the bright spots, with online sales rising more than 5 percent to $260.6 million and accounting for 12 percent of overall sales.

“About 70 percent of our customers now have already shopped one of our online sites before they walk in the door,” CEO Gina Drosos said during the company’s earnings call Wednesday.

In contrast, brick-and-mortar same-store quarterly sales fell 3 percent.

Signet shuttered a total of 262 stores last year and plans to continue targeting underperforming stores, particularly in malls. It will close 150 more stores this year.

“We have seen better performance from our off-mall locations,” Drosos said on the call. “And so we have been moving systematically out of lower-performing malls and simplifying by moving out of regional banners.”

Since fiscal year 2016, Signet’s total store count has fallen 8 percent, SEC filings show.

It had 3,625 stores at the end of FY 2016. By the end of FY 2019, the retailer had 3,334.

By the end of FY 2020, Signet will have reduced its store base by 13 percent over a three-year period, Drosos said.

However, fewer stores has not translated into fewer sales opportunities, outgoing Chief Financial Officer Michele Santana noted on Wednesday’s call.

“When you look at the stores that we are closing and the geographic ring that surrounds it where we have either another banner or a sister banner, we have been pretty successful in capturing a sales transference rate to mute impact to the bottom line,” she said.

Looking to boost sales in its remaining locations, the retailer also will begin testing piercing in several Kay stores during the second half of fiscal 2020, perhaps looking to capture some momentum from the company’s top-performing segment.

Piercing Pagoda was a sales standout in the fourth quarter, seeing same- store sales climb more than 17 percent.

Signet’s plans for fiscal 2020 include introducing a greater assortment of products and upgrading its websites and mobile platforms.

The retailer will also look to self-purchasing and gifting as potential growth drivers.

Fiscal 2020 sales are expected to be between $6-$6.1 billion

with same-store sales flat at best.
Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

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