I've been giving much thought about Signet Jewelers’ first quarter earnings report and conference call. As always, the company provided a wealth of information and insights to its business, and, with that, its view of the the US jewelry market. The most important point for me was the need to boost the bridal segment. Signet needs to deliver on its expectation that engagements are about to spike, resulting from a lag in dating caused by the pandemic. It has played up that notion over the past year. One would have expected to start seeing the effect of the delay over the holiday season and into the first quarter. But Signet’s bridal sales fell 11% and 12% respectively in the two periods. The numbers suggest a fundamental weakness in the market that extends beyond the effects of the dearth of romance during Covid. It re-emphasizes the the importance of Signet’s collaboration with De Beers Group to promote natural diamonds through joint marketing and training of Signet sales personnel. One cannot rest on one's laurels... it will take a major marketing effort to reverse the trend. Here’s my summary of Signet’s 1Q results along with some additional thoughts. 👇 https://lnkd.in/g6kD68nr
Marc Cohen
3w
Avi Krawitz- There was certainly an overload of information and data in their recent quarterly report and you raise a good observation for debate. The Leadership at Signet are not only officers of the company but are stakeholders who collectively own approximately 1.5 million shares ( Gina, the CEO owns 778,000 shares) . Their message needs to resonate positively with the 548 Funds which own approximately 29 million shares. That said, if you were in their shoes , how carefully would you describe the expectations of the next upcoming months? There are a few trends which may have some impact on their performance which were not discussed in her interview with Jim Cramer. Store closures last year were a net 150, they now have 15% less square footage of selling space in the market. Gold and Labor prices have increased ,21% on Gold, 4% on labor . Then there is the YOY increase in the cost of consumer credit which has a big influence on the spending side. They have already increased their marking expenditures ( I believe it was 500 million which sounded way too high, but was an increase from prior years.) In 6 months, you���ll have another version of their report card and will see if they have really executed on their game plan.
Daniel Scott
3w
De Beers biggest challenge might be Signets' current inventory of lab bridal, especially in Jared and Kay's (+ their online properties especially at clearance prices). I understand a big push online for natural (at those locations and at Zales I believe) is soon to kick off, however.
As they ditched the LGD THE AVERAGE TICKET of an Engagement ring will go up and compensate for the last quarter Signet and De Beers need to connect on the corporate level not just joint marketing It’s a marriage made in heaven
Thanks for the great summary Avi!
Vin Lee
3w
My knee jerk reaction to the results is simply Go woke Go Broke. Signet chased Helzbergs LGD initiative. Now all of the marketing for their brands is completely diluted. This alienation of the core target market of American Mall jewelry shoppers is why they keep sinking. If you can't get the foot traffic to enter your showrooms it doesn't matter if you have DeBeers highly-trained salespeople pushing either fake or real diamonds,
Marc Vega
3w
This issue extends far beyond the mere dollars and cents of quarterly profits and losses per sales unit. It signifies a cultural shift influenced by the rise of online marketing and changing consumer preferences. Unlike our parents, we no longer shop at the same traditional brands they did. Each generation strives for independence, often seeking alternatives to established brands. Larger companies, capable of rapid adaptation, are advancing more quickly. For example, the competitive landscape has intensified with mid-level and high-end chains, especially in niche markets like rare carats, directly challenging James Allen. Moreover, consumer behavior has evolved, with foot traffic in malls declining and a growing desire for unique and different experiences. Traditional brands, regardless of their partnerships with entities like De Beers or their marketing campaigns, struggle to compete in this new environment. Just what I see from the other side of large corporations and, hear from our own clients.
Harry White
1w
With more and more people becoming familiar with the fact that Lab grown are absolutely worthless I foresee a slow but progressive move towards natural diamonds as a valuable asset and a sort after luxury goods item mark my words, the date and the time I will be right
I want you to know I used to be a jewelry display designer at Bates Display in Corona California during the 90s. Like to see beautiful layouts in jewelry stores
Consultant to Brands, Suppliers, Retailers, Executive Coach, Keynotes, Sales Training, Hiring Workshops, Author, Hiring Squirrels, Sell Something and The Sales Minute, Columnist: National Jeweler, The Jewelry Book.
3wThe promised for Bridal boom seems more wishful thinking than expectation. We've already seen the pandemic-related decline and recovery and there's no indication outside of Akron that there's a significant upside to come. That LG has contributed to a decline in average ticket is not in dispute, so the optics of the partnership with DeBeers are very positive. I continue to be surprised that nobody is talking about a major elephant in the room, and that is the decline in mall traffic. Simon alone was down 9% v 2019, and I suspect malls are where the majority of Signet stores still reside. Should be an interesting watch for the rest of the year.