Financials

Signet Sees Comps Drop, Begins Outsourcing of Credit

FinancialsMay 25, 2017

Signet Sees Comps Drop, Begins Outsourcing of Credit

The outsourcing includes a seven-year deal with Progressive Leasing that will allow customers who don’t qualify for credit to do a lease-purchase on jewelry.

2016_Kay-Jewelers.jpg
Kay Jewelers parent company Signet Jewelers Ltd. saw comps drop nearly 12 percent in the first quarter, with the number of transactions declining at all Signet-owned stores due to a drop in foot traffic.

Akron, Ohio--Same-store sales sank nearly 12 percent in the first quarter for Signet Jewelers Ltd. due to a slowdown in jewelry spending in an already challenging retail environment.

Total sales for Signet in the first quarter ended April 29 were $1.40 billion, down 11 percent year-over-year.

At Kay Jewelers, Jared the Galleria of Jewelry and the regional stores under the Sterling Jewelers umbrella, same-store sales declined 13 percent, and they dropped the same amount at the stores under the Zale Jewelry umbrella, which includes Zales Jewelers, Gordon’s, Peoples and Mappins.

Piercing Pagoda posted the best performance, with same-store sales there declining only 1 percent on the back of strong sales of 14-karat gold chains, children’s jewelry and religious jewelry.

Same-store sales were down about 4 percent in the stores that Signet operates in the United Kingdom.

“As anticipated, we had a very slow start to the year,” Signet CEO Mark Light said on the company’s earnings call Thursday morning.

He attributed some of the drop in sales to Mother’s Day being later this year, which pushed all those dollars into the second quarter.

Light mentioned several times during the call the investments the company is making in digital marketing and improving the online experience for its customers--faster page downloads on its website, better SEO, online appointment booking, local store inventory search--and said they are starting to see these improvements “take hold.”

E-commerce was the only area in which Signet recorded positive first quarter results, with sales rising 1 percent from $80.1 million to $81 million.

Signet also has adopted a new clienteling system at its stores that, Light said, will better enable salespeople to optimize their interactions with customers before, during and after they visit stores.

“It’s all about making sure that we give our customers the superior, customer-first omnichannel experience.”

Signet plans to close 165 to 170 stores in fiscal 2018 and open about 90 to 115; its net selling square footage will remain flat or decline 1 percent. The stores the retailer is closing primarily will be in malls, where foot traffic has declined sharply in recent years, while the openings will mainly be Kay off-mall locations.

Also on Thursday morning, Signet announced that it has begun the outsourcing of its in-house credit program.

Expected to be fully implemented by October, the first phase of the outsourcing involves Signet selling $1.0 billion of its prime-only credit

quality accounts receivable to Alliance Data System Corp. at par value.

Signet also inked a seven-year agreement with Alliance Data to become its primary provider of credit funding, servicing and associated program functions to customers of Kay Jewelers, Jared the Galleria of Jewelry and its regional brands. (Alliance Data has been providing credit services to customers who shop at the stores under the Zale umbrella since 2013.)

For now, Signet will keep the non-prime accounts on its balance sheet and continue to open new accounts, but will outsource the credit servicing functions to Genesis Financial Solutions for an initial term of five years.

In addition, Signet has signed a seven-year deal with Progressive Leasing--a subsidiary of lease-to-own retailer Aaron’s Inc.--that will allow customers who don’t quality for any sort of credit to do a lease-purchase on their jewelry. The leasing program is expected to be available in Signet’s U.S. stores by July.

Signet executives said during Thursday morning’s earnings call that under the terms of its deal with Progressive, the latter will buy the jewelry from Signet and then enter into the lease contract with the customer.

By the end of the first phase of outsourcing, Signet will have sold more than half (55 percent) of its credit portfolio to Alliance Data.

About 250 employees who worked on in-house credit for Signet will become employees of Alliance Data and about 650 employees will go to Genesis Financial Solutions, with the remaining employees being retained by Signet for customer care operations.

Signet started taking a hard look its in-house credit program in 2016 after analysts began questioning the amount of risk the retailer was assuming.

Signet plans to eventually outsource its entire credit program, but company executives said on Thursday’s call they don’t have a timeline for that yet.
Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

The Latest

Stock image of people shopping in a mall
SurveysApr 03, 2025
2025 Retail Sales to Grow More Slowly Amid ‘Uncertainty,’ Says NRF

The National Retail Federation expects retail sales growth to return to pre-pandemic levels as consumers continue to face inflation.

Tallulah Willis’ Engagement Ring
TrendsApr 03, 2025
Tallulah Willis Imbues Antique Engagement Ring With Magic

The 4-carat, old mine brilliant-cut diamond engagement ring was co-designed by Willis and New York City-based brand Karina Noel.

158.2-carat yellow diamond from Diavik
SourcingApr 03, 2025
Canadian Mine Produces 158-Carat Yellow Diamond

Rio Tinto unearthed the diamond at its Diavik mine in Canada’s Northwest Territories.

bench jeweler 1872x1052.png
Brought to you by
The Heart of the Industry: Giving Bench Jewelers the Recognition They Deserve

Bench jewelers spend years honing their skills, Jewelers of America’s Certification validates their talents.

Buccellati Naturalia exhibition
CollectionsApr 03, 2025
Buccellati to Open Immersive Exhibition in Milan

The multisensory experience, open April 8-13, will feature the brand’s silver creations among dream-like scenes of natural landscapes.

Weekly QuizApr 03, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Jewelers of America logo
Policies & IssuesApr 03, 2025
Jewelers of America to Hold Webinar on Tariffs

The virtual event will take place April 7 at 3 p.m.

Bea Bongiasca Animali Tarallo Collection Royal Blue Tang Fish “Dory”
CollectionsApr 02, 2025
Bea Bongiasca’s ‘Tarallo’ Collection Expansion Is a Zoo

The pieces in “Animali Tarallo” portray animals from stingrays to elephants through portraits and interpretations of their patterns.

Facets-of-Fire-Difference-You-Can-See.jpg
Brought to you by
Natural Diamonds Should Mean More

Natural diamonds mean more than lab-grown, but when every cut is ideal, they all look the same. Customers want more—Facets of Fire delivers.

Neiman Marcus Downtown Dallas store
MajorsApr 02, 2025
Neiman Marcus’ Dallas Flagship Will Remain Open, For Now

Parent company Saks Global said the iconic location will be open through the holiday season as it decides what to do with the space.

Natural color diamonds on display at Smithsonian National Museum of History
SourcingApr 02, 2025
Winston’s Collection of Natural Color Diamonds Now on Display in D.C.

Ronald Winston, son of Harry Winston, donated the diamonds to the Smithsonian National Museum of Natural History in Washington, D.C.

Punchmark
Events & AwardsApr 02, 2025
Punchmark to Host Client Workshop

The educational event will take place in Charlotte, North Carolina, this May.

Bergman Jewelers family
IndependentsApr 01, 2025
Bergman Jewelers in Omaha Closing After 137 Years

The independent jeweler first opened its doors in 1888.

QVC Group Inc. logo
MajorsApr 01, 2025
QVC Group to Cut 900 Jobs in the U.S.

The layoffs come amid the TV shopping channel’s efforts to restructure and focus on live shopping through social media.

Coconut Grove Jewelry & Watch Show
Events & AwardsApr 01, 2025
U.S. Antique Shows Adds Fall Show in Florida

The debut event will take place in Miami’s Coconut Grove neighborhood this fall.

The Jewelry Symposium (TJS)
Events & AwardsApr 01, 2025
TJS to Host Discussion on Jewelry Industry’s Labor Shortage

The roundtable will take place May 17 ahead of the trade show’s welcome dinner.

Peanuts x Monica Rich Kosann Collection Bracelets
CollectionsApr 01, 2025
Monica Rich Kosann Says ‘Good Grief’ in Peanuts Jewelry Collection

The “Peanuts x Monica Rich Kosann” collection features the comic strip’s classic vocabulary across 10 bracelet designs.

Graphic for What Do We Mean When We Say “Recycled” Gold webinar
Recorded WebinarsMar 31, 2025
Watch: What Do We Mean When We Say ‘Recycled’ Gold?

Three industry experts dive into the complexities of the material often marketed as an “ethical” alternative for metal in jewelry.

Mindi Mond Clarity Earrings
TrendsMar 31, 2025
Amanda’s Style File: Dripping in Diamonds

Diamonds are not only one of the most prominent gemstones, but the birthstone for those born in April.

Lashbrook ring
MajorsMar 31, 2025
Lashbrook Expands Into Luxury Golf Gifts With Acquisition

The Utah-based company known for making wedding bands has acquired Doubloon Golf.

Bulgari and LVMH Watches CEO Jean-Christophe Babin
WatchesMar 31, 2025
Bulgari CEO Jean-Christophe Babin Will Also Head LVMH Watches

The longtime luxury executive led one of LVMH’s watch brands, TAG Heuer, for 12 years before taking over Bulgari in 2013.

Surveillance footage of robbery
CrimeMar 28, 2025
2 Suspects Arrested in $1.7M Smash-and-Grab Robbery of NY Jewelry Store

Authorities said the robbers fled with jewelry and 70 Rolex watches, later taking pictures of themselves posing with big stacks of cash.

Nephrite and Jadeite by Heinrich Fischer, Richard W. Hughes
SourcingMar 28, 2025
19th-Century Jade Book Now Available in English

Lotus Gemology founder Richard W. Hughes has translated Heinrich Fischer’s 1880 book “Nephrit und Jadeit” from its original German.

LÖF The Valentine Ring
CollectionsMar 28, 2025
Piece of the Week: Löf’s ‘The Valentine’ Ring

The ring's design features contrasting lines influenced by work from architecture-inspired photographer Nikola Olic.

Eggs on a shelf
SurveysMar 27, 2025
Consumer Confidence Falls in March Amid ‘Gloomy’ Outlook

The Conference Board’s index fell as consumers continued to worry about the impact of tariffs, the labor market, and the price of eggs.

Richard Rainsford memorial ring
AuctionsMar 27, 2025
300-Year-Old Ring Linked to Witch Trial Judge Goes Unsold at Auction

However, two medieval jewels surpassed estimates at Noonans Mayfair’s recent jewelry auction in London.

Austin Butler
WatchesMar 27, 2025
Austin Butler Joins Breitling as Brand Ambassador

The Oscar-nominated actor debuted in the campaign for the new “Top Time B31” collection, which introduced Breitling’s Caliber B31.

ICA Congress Brazil 2025
SourcingMar 27, 2025
Susan Jacques, Gaetano Cavalieri to Headline 2025 ICA Congress

The Congress is scheduled to take place May 19-22 in Brasilia, Brazil.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy