Signet Scaling Back China Buying

RAPAPORT... Signet Jewelers plans to reduce its purchasing of Chinesegoods by about 50%, aiming to minimize the impact of US tariffs on thebusiness. "We have been successful in working with our vendors to movea significant amount of our China exposure to other countries," Signet CEO GinaDrosos said last week. The percentage of merchandise the retailer sources fromthe key market will be in the "mid teens" by the end of the current fiscal year on February 2, 2020, compared with 30% in June 2019, the executive said in aninvestor call transcribed by SeekingAlpha. As a result, Signet does not expect to pass the costs of thetariffs on to consumers, Drosos noted, despite having warned of a potentialimpact on retail prices in a previousconference call in June. Supply-chain flexibility will also help thecompany achieve the full-year operating profits it had forecast. The Trump administration introduced additional duties of 10% on a range ofChinese products, including jewelry, from September 1. "Going forward, we are continuing to work through mitigationstrategies in partnership with our multinational vendors," Drosos added. Image: Cargo containers at a harbor in Shanghai, China. (Shutterstock)