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H Samuel sales rise but Signet’s UK profits fall

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Total sales at jewellery specialist H Samuel increased 8.7 per cent year-on-year to $160.9 million (£98.4 million) in the six months to July 31st, helping US-based parent company Signet achieve strong revenue growth over the period.

Like-for-like sales at the British high street retailer were up three per cent in the first half of trading compared to H1 in 2010, but this dropped to 1.3 per cent when sales are calculated at constant exchange rates.

Profits wise, the performance of the group’s UK division, which also includes Ernest Jones, did not bring such positive news.

Net operating income in the UK decreased by $700,000 to $2.6 million, representing a reduction of 21.2 per cent year-on-year as various economic factors took hold.

Ernest Jones reported total sales of £143 million, which although an increase of 4.4 per cent year-on-year translates to a 2.7 per cent reduction in constant exchange rates compared to the same six months of trading one year before.

Signet’s UK division as a whole experienced a 0.6 per cent decline in sales calculated by this measure.

The US market, which represented 82 per cent of Signet’s $1.68 billion sales during H1, helped ensure the group’s gross margin continued to grow and its net operating income jumped up by $77.5 million to $221 million.

Mike Barnes, Signet CEO, said that company has been successful in developing strategies to present “differentiated and sought-after product ranges” and creating “inspiring marketing campaigns” to boost sales in the second quarter of its financial year.

“During the quarter, our branded jewellery initiatives drove strong US same store sales performance and assisted our UK division’s sales to outperform a challenging retail marketplace,” he added.

With the UK retail landscape particularly difficult at the moment, as consumer confidence remains low and household incomes continue to be squeezed, it will be interesting to see how Signet adapts the in-store environments of its H Samuel and Ernest Jones brands, if at all.

Fellow UK jewellery firm Goldsmiths, owned by Aurum Holdings, announced yesterday that it will be unveiling a new concept called ‘the boutique’ at its Westfield Stratford City store when it opens next month.

Aimed at a younger audience, the new retail offering will use cutting edge technology to give customers a more interactive shopping experience.

Commenting yesterday, Commercial Director for Goldsmiths Richard Gerrard said: “We have created an inspiring and interactive lifestyle-led environment, developed a distinctive sales mantra and engaged with technology in a way that appeals directly to our target customer – and this fresh and inventive approach cannot be rivalled elsewhere in the market.”

Published on Thursday 25 August by Editorial Assistant

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