Signet Jewelers now accounts for 9.3% of the U.S. jewelry market, up from the 6% it claimed in 2021, CEO Gina Drosos said on an earnings call Thursday, following the release of its fourth-quarter financial results.
Drosos predicted the U.S. jewelry market will be “down low single digits to roughly flat” in 2022—a lesser decline than some other forecasts. But she also said Signet will continue to gain market share, and that its Valentine’s Day sales were “strong.”
She noted the jewelry business faced certain “macro headwinds” in the months ahead, including a possible renewal of travel and continued concerns about inflation.
But she added that “the jewelry category has tended to be more inflation-proof than other areas of retail. And our research indicates that’s because consumers see the inherent value in jewelry. Gold, other precious metals, diamonds, appreciate over time, as opposed to other things that they could spend on that depreciate.”
And she did see one notable headwind: “Weddings are back.”
“Couples are getting married at a record-setting rate,” she said. “We expect more weddings this year than we’ve seen in nearly 40 years.
“Bridal is an important part of our business, of course, but it’s much more than engagement rings. The average couple buys their wedding bands two months ahead of the wedding. And wedding days give us the opportunity to provide jewelry for the bride and groom, bridesmaids, mother of the bride, and guests attending the wedding.”
Other points she touched upon:
– Signet has suspended all purchases with “Russian-known entities” since the beginning of the Ukraine invasion and has “asked suppliers to do the same,” Drosos said. It has also donated $1 million to the Red Cross for Ukraine relief.
Its 10-K offers more detail on possible Russian risks: “Signet’s direct purchases from Alrosa and its sourcing arrangement in Russia do not represent a significant part of its operations. However, any interruption in the total market supply of diamonds due to the ongoing Russia-Ukraine conflict or domestic or foreign government sanctions against Alrosa or Russian diamonds may impact the ability of Signet’s suppliers to provide Signet with responsibly sourced diamonds that were mined by other companies or in other countries.”
– Signet has increased its advertising budget by more than $180 million over the last year, and it expects to up its marketing spend over the next year.
– Signet’s e-commerce sales over the last year totaled $1.5 billion, making it “the largest online specialty jewelry retailer in the United States.” Around 20% of its sales are made online, Drosos said.
– Signet’s largest banner, Kay, once considered the epitome of a mall jewelry chain, now has around 50% of its stores off-mall, said chief financial officer Joan Hilson.
Photo © Kay Jewelers.