The world’s largest retailer of diamond jewelry is downsizing its store portfolio as it accelerates its emphasis on e-commerce.
Signet Jewelers Ltd. said that at least 150 stores in North America and 80 stores in the U.K. will not reopen after going dark due to the COVID-19 pandemic. It also plans to permanently close at least another 150 locations by the end of the year. (Currently, Signet operates approximately 3,200 stores globally primarily under the name brands of Kay Jewelers, Zales, Jared, H.Samuel, Ernest Jones, Peoples, Piercing Pagoda,)
In addition, Signet said it is discussions with landlords about rent deferrals and abatements. It also is continuing its store-level analysis.
On the company’s quarterly earnings call with analysts, CEO Virginia Drosos said that during the last few years, as part of Signet’s ‘Path to Brilliance’ strategy, it reduced its store footprint by 13%, largely moving out of all D malls and regional banners.
“Now in the current environment, we are accelerating our optimization efforts further reducing our exposure to declining C and B malls,” she said. The newly announced closures, will bring Signet’s cumulative footprint reduction to more than 20%.
Signet’s loss widened to $198.6 million, or $3.83 a share, for the quarter ended May 2, from a loss of $18.2 million, or $0.35 a share, in the year-ago period. Excluding non-recurring items, the adjusted loss per share was $1.59.
Sales fell 40.5% to $852.1 million, with a same-store sales decline of 38.9% as the majority of its stores remained shuttered during the pandemic. E-commerce sales grew 6.7%.
In May, Signet began a staggered store reopening plan, with more than 1,100 locations now open. The performance of reopened stores has been encouraging with sequential week over week sales performance improvements in open stores, the company said.
“We began our fiscal year with strong Valentine's Day sales performance, and then quickly pivoted and further adapted our e-commerce operating model to serve customers during stay-at-home restrictions with new technology, virtual consultation and selling solutions,” stated Drosos. “We are gathering valuable insights on customer behaviors and plan to use these learnings to enhance our competitive advantage and emerge stronger from the crisis with optimized virtual and physical footprints to meet our customers where and how they choose to shop.”