Same store sales at Ernest Jones and H.Samuel dropped by 3.7% in the nine weeks before Christmas, parent company Signet Jewelers Ltd. reports.
The higher end Ernest Jones same store sales dropped 2.2% compared to the same nine weeks in 2015, while H.Samuel sales dropped 4.9%.
“Same store sales decreases were driven primarily by fashion jewellery and beads, most notably at H.Samuel, offset in part by higher sales of bridal and watches,” Signet Jewelers said in a trading statement.
The American company’s financial results suffered even greater falls when reported in dollars, following the sharp drop in the value of the pound after Britain voted to leave the EU.
In dollars, the UK jewellery business experienced a 19.8% fall in sales. “UK Jewelry division total sales declines were driven principally by unfavorable foreign currency exchange rates,” the company explained.
British jewellery and watch retailers performed dramatically differently in 2016 depending on the product mix of offered by independent shops and multiples.
Every authorised agent of Rolex spoken to by WatchPro has reported double-digit percentage sales growth. On the jewellery side, Pandora concept store partners have described an equally positive year.
Ernest Jones, which stopped selling Rolex in 2012, would still have been expected to benefit from the weaker pound creating a price advantage for retailers of luxury watches in the UK, but without the “Rolex effect” the multiple appears to have lost market share to rival multiples including, Goldsmiths, Watches of Switzerland and The Watch Gallery.
H.Samuel faced a perfect storm. Pandora’s dominance of the branded silver jewellery market has sucked customers away from every retailer that does not stock the Danish brand.
On the watches side, its portfolio of fashion and lifestyle brands are all in the sub-£1000 price point category that has dropped across all UK retailers by almost 10% this year, according to GfK.