Signet Group total sales down by 7.3%

22 Dec '08

5 min read

In a very challenging marketplace, the quality of execution in all areas of the business remained a priority and a tight control of costs and inventory continued to be maintained. In merchandising, a number of new exclusive ranges have been successfully tested and expanded. Advertising expenditure has been realigned with increased emphasis on the more successful brands and media. For Kay, there will be a similar level of expenditure on national television although the number of impressions will be down mid single digits during the holiday season.

For Jared, there will be increased expenditure on national television, with the level of impressions similar to last year. In the year to date 40 stores have been refurbished and net new space growth during 2008/09 is expected to be about 4%, with Jared accounting for nearly all of the increase.

In 2009/10, net space is expected to be little changed. Given the focus on the core business, nearer term initiatives, and the current volatility in the rough diamond market, it has been decided to discontinue the Group's rough diamond sourcing capability.

In the 13 week period, the UK division's total sales were down by 15.0% on a reported basis to $162.0 million (13 weeks to November 3, 2007: $190.5 million) and by 4.4% at constant exchange rates (see note 11). Same store sales were down by 2.4%, with the last three weeks of the quarter down by some 8%. The net operating loss was $3.9 million (13 weeks to November 3, 2007: net operating income $1.7 million) reflecting lower same store sales.

In the 39 week period, total sales decreased by 5.0% on a reported basis to $546.7 million (39 weeks to November 3, 2007: $575.4 million) and by 1.0% at constant exchange rates (see note 11). Same store sales were up by 0.8%. Net operating income was $1.9 million (39 weeks to November 3, 2007: $4.3 million).

The average US dollar exchange rate for the period was 1 pound/$1.92 (39 weeks to November 3, 2007: 1 pound/$2.00). Gross merchandise margin was up 50 basis points on last year due to price changes, which more than offset higher commodity costs, mix changes and more targeted promotional activity. The division remains on track to achieve a full year gross merchandise margin rate similar to last year.

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Signet Jewelers Ltd

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