Sterling introduces new outlet concept, Jared Vault

FinancialsAug 18, 2016

Sterling introduces new outlet concept, Jared Vault

Sterling Jewelers is converting some of the Ultra Diamond outlets it purchased in 2012 into Jared Vault stores, a chain of outlet stores that sell overstock from Jared the Galleria of Jewelry.

Michelle Graff michelle.graff@nationaljeweler.com

Akron, Ohio--Sterling Jewelers is converting some of the Ultra Diamond outlets it purchased in 2012 into Jared Vault stores, a chain of outlet stores that sell overstock from Jared the Galleria of Jewelry.

Jared Vault is a new outlet concept for the company, which originally only announced plans to convert the Ultra Outlet stores into Kay Outlet locations when it completed the purchase in late 2012.

During a conference call held Thursday morning, company executives said they opened 18 Jared Vault stores in the first quarter, and expect to convert another 13 in the second quarter for a total of 31, essentially completing the transition of all Ultra stores into either Kay Outlet or Jared Vault stores.

While a company spokesman declined to provide a specific listing of the locations of the 31 Jared Vault stores, he did confirm they are located throughout the South, with some in the Northeast and a few in the West and Midwest.

“We are really excited by what we have seen in Jared Vaults,” Mike Barnes, CEO of Signet Jewelers Ltd., Sterling’s parent company, said during the call. “I don’t want to get too far in front of it but it was really dramatic the change we saw when we changed the nameplates.

“Vault gives it the feeling you are getting something valuable and not just discounted merchandise.”

Signet made the announcement Thursday morning during its first quarter earnings call with investors and analysts.

Sales were strong for the retailer in the first part of the year, and company executives said they continued to be strong in May, especially for Mother’s Day.

Signet’s U.S. division, comprised of Kay Jewelers, Jared the Galleria of Jewelry and a number of regional brands, posted a 3 percent year-over-year increase in same-store sales. Kay Jewelers turned in the strongest performance, with comps up 4 percent as compared with a 2 percent increase for Jared. An increase in the number of transactions at both drove the same-store sales increase.

Total U.S. sales rose 5 percent to $903.5 million. Fashion diamond jewelry, bridal and watches were the company’s best-sellers in the first quarter.

E-commerce sales rose 21 percent to $30.9 million, and more than 40 percent of visitors to the company’s e-commerce websites came from mobile devices.

Including Signet’s U.K. division, first quarter same-store sales were up 3 percent year-over-year, with the U.K. division posting

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a 4 percent increase in same-store sales. Total sales for the company rose 6 percent, from $993.6 million to $1.06 billion.

Operating income was $150.7 million, compared with $142.8 million a year ago.

“We remain pleased with our performance also for the first several weeks of May, including Mother’s Day,” Barnes said, adding that the retailer’s second quarter sales performance has been better than expected to date.

Also on Thursday, Signet released a statement reiterating its commitment to the $21-per-share price it is offering to buy rival Zale Corp., a price that has come under fire from certain groups of investors who say it is too low and are encouraging Zale’s shareholders to vote against the acquisition.

Signet urged Zale shareholders to vote for the merger. The company also said in the event the transaction doesn’t go through it remains “acutely focused on its own business.”

The Zale shareholder vote on the Signet merger is set for May 29.

Editor's note: This story was updated after publication on May 22 to add a comment from Signet Jewelers Ltd. on the location of its Jared Vault stores.

Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

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