The owner of Kay Jewelers, Jared and Zales is setting a big sales target as business starts to pick up again after a turbulent year.
In a presentation to investors Monday, executives from Signet Jewelers Ltd. announced a plan to boost annual sales to $9 billion — a huge jump from last year’s $5.2 billion and this year’s target of about $6 billion — by expanding e-commerce and providing more in-store services. The company sees an opportunity to seize about 10% of the fragmented jewelry market, since most jewelry stores are independent and don’t have robust online shopping operations. The company didn’t provide a specific time frame, but wants to meet the goal “in the coming years.”
Chief Executive Officer Gina Drosos is revamping Signet to sharpen its online focus while shifting its brick-and-mortar strategy. The company closed 395 stores last year, mostly in malls, and plans to shut another 100 this year. Despite the withdrawal from traditional shopping centers, Signet is expanding in off-mall locations.
Since Drosos took the top role in 2017, Signet’s online revenue has climbed as a percentage of overall sales — reaching 23% last year. E-commerce has been slow to catch on with jewelry shoppers, who have proven reluctant to make big-ticket purchases without ever touching the product. But there are signs consumers are overcoming their hesitation — especially during the pandemic.
“Consumer purchasing patterns in every category have changed permanently as a result of Covid and jewelry is no exception,” Drosos said in an interview. “Customers are more willing to buy even expensive jewelry online — even engagement rings.”
Prior to Monday’s investor meeting, Signet boosted its sales forecast for the quarter and full-year. The company sees revenue for fiscal 2022 at $6 billion to $6.14 billion, citing a lift from stimulus checks, tax refunds and consumer optimism as Covid-19 vaccines are rolled out.
Signet will spend as much as $175 million on capital expenditures this fiscal year as it upgrades technology — more than double last year’s amount. At the onset of the pandemic last March and amid the lockdown of nonessential retailers, Signet scrambled to offer services like virtual consultations and curbside pickup.
Now, with consumers opening their wallets once again, management hopes to draw more shoppers by offering services such as repairs. Last week, Signet announced the addition of a rental service with the acquisition of Rocksbox — a jewelry subscription business — for an undisclosed sum.
A critical part of the growth plan are moves to separate Signet’s many brands from each other. Piercing Pagoda, which sells cheaper goods from mall kiosks and has been a fast-growing area of the business, will expand by 100 locations this year. Meanwhile, the Jared and James Allen brands will sell more expensive items to distinguish them from Kay and Zales.
“In the past we’ve let them overlap, frankly,” said Drosos.