Despite Signet Jewelry’s strong growth in e-commerce, the global jewelry retailer is facing a significant 35% decrease in overall sales. The company has been prioritizing digital platforms due to the impact of COVID-19, leading to a substantial increase in e-commerce sales but a major drop in total sales.
For the second quarter ending on August 1, 2020, Signet reported a noteworthy decline in total sales to $888.0 million from $1.36 billion the previous year. This represented a 34.8% decrease in constant currencies and a 31.3% drop in total same-store sales. Nonetheless, the company saw a remarkable 72.1% increase in e-commerce sales, totaling $270.1 million, which helped compensate for the decrease in physical store sales by 46.0%.
The pandemic forced Signet to temporarily close 90% of its stores, leading to significant revenue decreases in both North America and international markets. Despite efforts to gradually reopen, both sectors experienced revenue declines. In North America, there was a 72.7% drop in same-store sales, driven by a 45.3% decrease in physical store sales, partially offset by a 72.7% growth in e-commerce. Similarly, international same-store sales decreased by 38.8%, with brick-and-mortar sales falling by 54.6% but e-commerce revenues rising by 65.6%.
The company recorded a net loss of $90.0 million for the quarter, compared to $44.3 million in the same period last year. Signet has strategically closed 380 stores permanently during the pandemic to focus on digital initiatives. This includes investing in virtual sales, with the implementation of a full-time virtual selling team and training 15,000 store associates in virtual selling capabilities.
CEO Virginia C. Drosos highlighted Signet’s response to the pandemic, emphasizing the acceleration of their OmniChannel transformation and the prioritization of cash preservation. Virtual consultations have been successful, with over 300,000 customers served virtually in the second quarter, leading to higher conversion rates.
In the first half of the year, Signet reported total net sales of $1.74 billion, down from $2.80 billion the previous year, with a net loss of $295.3 million compared to $62.5 million in the same period. Due to uncertainties related to the ongoing health crisis, Signet Jewelers has refrained from providing financial guidance for the third quarter or the full fiscal year.
In conclusion, while facing challenges during the pandemic, Signet Jewelry’s focus on digital initiatives and e-commerce growth signal a potential for recovery and adaptation to the evolving retail landscape.
For more information on Signet Jewelry, visit their official website. To learn more about the impact of COVID-19 on the retail industry, check out this Forbes article.
