Signet Holiday Sales Disappoint

RAPAPORT... Signet Jewelers reported holiday sales fell 3% year on year to $1.88 billion, as issues relating to outsourcing its credit transactions adversely impacted the business. Signet in October sold its prime credit program to Alliance Data Systems for $960 million, meaning that credit purchases were now outsourced to the third party rather than extended by Signet. However, disruptions in the system, primarily at its Kay Jewelers stores, put a dent in the important holiday period.Signet's same-store sales declined 5.3% for the nine-week period that ended December 30. "During the holiday season, we made positive progress on our strategic priorities, offset primarily by the negative impact of the credit-outsourcing transition, as evident [from] the mixed performance across our banners and channels," said Signet CEO Virginia Drosos. Sales at the Sterling Jewelers division, which consists of Kay and Jared, slid 4.5% to $1.15 billion, and same-store sales dropped 8.5%. Its UK division also disappointed, with sales down 4% to $177.1 million and same-store sales slumping 10.3%.Signet's strongest performer was its Zale division, where sales rose 1% to $556.2 million, and same-store sales increased 4%, thanks to a strong performance in bridal and fashion jewelry, the company noted. Its e-commerce business jumped 48% to $210.5 million, driven by the addition of James Allen, which the company acquired earlier in the year. The disappointing results followed a string of positive reports about the holiday season, with Mastercard SpendingPulse reporting a 5.9% rise in overall jewelry sales across the US during the two-month period. Signet shares slumped 7% in Wednesday-morning trading on the New York Stock Exchange.Image: Tooykrub/Shutterstock