- Kay, Zales, and Jared are all in trouble after a weak holiday season.
- Signet Jewelers CEO Virginia Drosos recently said in a statement that the holiday season “fell short” of the retailers’ expectations.
- It’s just the latest instance of bad news for the jewelry giant, as millennials’ adopt different jewelery-buying habits from past generations.
Diamonds aren’t necessarily millennials’ best friends. At the very least, the jewelry-shopping habits of young people are a world away from that of their parents’ precious-gem preferences.
And that may be part of the reason it was a rough holiday season for the jewelry retailers Kay, Zales, and Jared.
Millennials have more options when it comes to glitz, including nontraditional rings and cheaper lab-grown diamonds, which cost 30% to 40% less than their mined counterparts. The Financial Times has reported that certain legacy brands like Tiffany & Co. and Cartier have also been more adept at capturing the category of millennials on the lookout for luxe offerings.
While De Beers CFO Nimesh Patel told Business Insider last year that the perception millennials were saying no to diamonds was a “fallacy,” he noted that younger people were increasingly buying the gems for themselves – rather than for loved ones.
But this most likely comes as cold comfort to chain jewelers like Kay, Zales, and Jared. Signet Jewelers, the jewelry giant that owns all three retailers, last week reported that its same-store sales were down 1.3% for the nine weeks leading up to January 5.
“Our holiday season performance fell short of our expectations,” CEO Virginia Drosos said in a statement to investors on Thursday. “Early improvements in refreshed merchandise assortment, digital marketing and OmniChannel were more than offset by larger than expected declines in legacy product lines.”
Drosos went on to say that the sluggish holiday sales indicated Signet must double down on its efforts to “right-size” its store base. This most likely means the future holds store closings for Kay, Zales, and Jared, Fortune reported.
A Signet Jewelers representative told Business Insider the company had not announced any store closings or openings for the next fiscal year. The person said specific announcements regarding Signet’s store base would probably take place with the March 14 release of the company’s fiscal year-end results.
While it’s not clear whether store closings are imminent, the holiday sales numbers certainly make for gloomy news for the jeweler giant, which is domiciled in Bermuda and headquartered in Akron, Ohio. And it’s just the latest in a string of ill tidings for the company.
At the very end of 2018, the Gracian Capital short-seller Matthew Kliber called Zales overvalued and predicted that Amazon would step in and take a bite out of the jeweler’s business. Back in November, Signet Jewelers’ shares dropped 25% after the company announced a major loss. In 2017, critics cut into the company for its practice of using forced arbitration.
Still, Drosos offered some insight into how Signet Jewelers planned to turn things around.
“We expect to accelerate initiatives to enhance our product assortment, marketing personalization and analytics, promotional effectiveness, service offerings, and e-commerce to deliver a more seamless and engaging omnichannel customer experience,” Drosos said.