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Zale Corp.’s sales top Sterling Jewelers
Stores under the Zale umbrella recorded better-than-expected holiday sales while comps at Kay Jewelers and Jared the Galleria of Jewelry fell short of expectations.
Akron, Ohio--Stores under the Zale umbrella recorded better-than-expected holiday sales while comps at Kay Jewelers and Jared the Galleria of Jewelry fell short of expectations, parent company Signet Jewelers Ltd. reported Thursday.
Same-store sales for Zale increased 4 percent, including a very strong 8 percent increase in Peoples stores in Canada and a 4 percent increase in same-store sales for the division’s flagship chain, Zales. Unstoppable Love, Love by Vera Wang and Arctic Brilliance, a line of pieces set with Canadian diamonds, were the top-sellers.
Chief Financial Officer Michele Santana said during a conference call Thursday that Zale’s stores saw more shoppers but that those shoppers spent less, with the sales of pieces from the Unstoppable Love collection, a lower-price line of fashion diamond jewelry set with diamonds that move with the wearer, pulling down the average transaction value.
Conversely, foot traffic was lower but the average transactions value was higher for Sterling Jewelers Inc. (Kay and Jared), which recorded a 3 percent increase in same-store sales in November and December. Bridal did well for the Sterling brands while lower-price-point fashion pieces, including the Jane Seymour line and beads, fell short of expectations.
Diamond brands Neil Lane and Tolkowsky along with Le Vian, unbranded diamond stud earrings and Diamonds in Rhythm--Sterling’s brand of diamonds that move with the wearer, like the Unstoppable Love that Zale carries--were the top sellers.
During Thursday’s call, an analyst asked if the holiday-season slowdown in sales of Pandora and Charmed Memories is an indication that the category has run its course.
Signet CEO Mark Light said no, pointing out that beads did exceptionally well for the company’s U.K. division.
“We believe that beads is going to be staple in our business. That being said, we are always focused on looking for other traffic (-driving) items, other areas, other lower-price-point units to make sure we bring traffic into our stores. We are never complacent,” he said. “We don’t believe that this a fad and that that business is done. We believe this could be a one-quarter issue.”
As a whole, Signet Jewelers Ltd. reported that its same-store holiday sales rose 4 percent, down slightly from the 5 percent increase recorded for the 2014 holiday season.
The company’s U.K. division, which has struggled in recent years, outperformed the U.S., posting a 10 percent increase in same-store sales for the holiday season on the
back of strong sales of branded diamonds, beads and watches as well as the growing popularity of “Black Friday” in countries outside the United States.
It was the division’s best holiday in 12 years, Light said during the call.
The November-December results did not impact Signet’s annual outlook. The retailer said Thursday that is still expects same-store sales to increase 3 to 4 percent for the fiscal year, which ends Jan. 31.
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