Virginia Drosos declared a victory of sorts at Signet Jewelers, having pulled through a year of the pandemic and wrapped up a three-year strategic plan that made the company more digital and agile.
Now, with fourth-quarter profit and sales gains in the books, the chief executive officer is setting new goals for the jewelry giant with an eye to both “make the pie bigger and get a bigger slice of the pie.”
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Drosos said the company has made three big changes over the past few years.
“First, our culture is stronger. We’re more agile, more innovative, more efficient and truly unified behind an inspiring purpose,” she said, referring to Signet’s corporate drive to “inspire love.” “Second, we’re much more data-driven today than we were then, with deeper insight that enables us to create highly personalized customer experiences and move with greater speed and precision. And third, we have a broader and stronger set of core strengths that create sustainable and growable competitive advantages.”
Signet’s efforts to update its operations helped it bounce back from the big initial COVID-19 hit.
The parent to Kay Jewelers, Zales, Jared, Piercing Pagoda and more drove fourth-quarter net profits up 37.4 percent to $255.7 million. Sales for the three months ended Jan. 30 inched up 1.5 percent to $2.2 billion. E-commerce sales rose 70.5 percent and made up 23.4 percent of total sales.
Still, the gains over the holiday season weren’t enough to pull the year into positive territory and Signet’s annual losses tallied $48.7 million on a 14.8 percent decline in sales to $5.2 billion.
Over the past three years, the company cut $300 million in expenses, trimmed its store footprint by more than 20 percent to reduce exposure to malls and zeroed in on digital. (The real estate push is continuing, with the 2,800-door retailer planning to shutter more than 100 stores this year while opening up to 100 locations, primarily kiosks).
Drosos said the company prioritized data analytics and pointed to Kay Jewelers, which cut its TV ad spending in half over the past three years while more than doubling its digital marketing.
“This change in mix has been data-driven,” she said. “We know with the precision we didn’t have three years ago which media provide the best incremental return to make media spend more efficient. This capability, combined with our scale, is a meaningful competitive advantage. We’ve shifted significantly toward digital, which enables customized communication, but we’re still able to command a leading TV presence in the jewelry industry at the same time, which builds awareness and brand equity. It’s a very effective combination.”
Now Drosos is looking to drive innovation to help grow the jewelry industry while also getting more share as it expands.
“We will win in our biggest businesses,” she said. “We have the leading retail jewelry brands in their respective markets: Kay Jewelers in the U.S., H. Samuel in the U.K. and Peoples in Canada.…We’ll accelerate services, making it the glue that builds lifetime bonds with our customers.…We’ll expand accessible luxury and value.…[And] we’re committed to lead digital commerce and jewelry.”
Investors liked what they saw and sent shares of Signet up 7.9 percent to $64.02 in midday trading Thursday.
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