UK Jewelry, the division of Signet Jewelers that operates H.Samuel and Ernest Jones in Britain, is aiming to close stores in “smaller retail centres” because they do not justify the the investment to refurbish them.
Seb Hobbs, president and chief commercial officer at Signet Jewelers, gave WatchPro an exclusive insight into his plans for the UK, and how the organisation will reshape its retail portfolio.
New store openings are expected to be limited because the group wants to focus on larger stores in shopping centres where it is not yet represented. These opportunities, however, are few.
“Limited new real estate development taking place would make it challenging to identify and secure suitable new store locations,” says Mr Hobbs.
“The UK Jewelry division has a more diverse range of store locations than in the US or Canada, including some exposure to smaller retail centers which do not justify the investment required to refurbish the site to the current store format. Consequently, the UK Jewelry division is gradually closing stores in such locations as leases expire or satisfactory property transactions can be executed; however, the ability to secure such property transactions is not certain,” he adds.
In what the global company describes as a tough trading environment in its core market of the USA and in Britain, Signet says that it must focus its investment where it can bring the greatest return.
“The rate of new store development is dependent on a number of factors including obtaining suitable real estate, the capital resources of Signet, the availability of appropriate staff and management and the level of the financial return on investment required by management,” Mr Hobbs explains.
In its Q1 trading statement, Signet Jewelers said that same store sales dropped by 3.5% in the three months to April 30.
“The SSS decline was driven principally by lower sales of jewellery offset by higher sales of watches. Strong sales of prestige watches drove average transaction value,” the company said in a note accompanying its financial report.
H.Samuel performed worse than the more upmarket Ernest Jones network. Same store sales at H.Samuel dropped by 5.6% in Q1 to $60.6 million, while Ernest Jones dipped by 1.5% to $61.9 million.
Mr Hobbs says that UK Jewelry will look to expand and improve its retail portfolio, with Ernest Jones receiving the greater proportion of that investment.
“In the UK we plan to continue the significant investments we have made over recent years in upgrading, expanding and enhancing the environment of our stores, particularly in Ernest Jones,” Mr Hobbs states.