Investment Column: Goldsmiths extends its chain

On the face of it, Jurek Piasecki, head of jewellery retailer Goldsmiths, had little reason to smile yesterday. He revealed that the company had slipped into the red in the six months to August, with losses of just over pounds 300,000. The group's share price closed 9p down at 331.5p.

It all seems a far cry from last year's rosy sentiment, when Goldsmiths unveiled its first profits since flotation in 1990 and said it wanted to bid for the UK jewellery businesses of Signet, the former Ratners group. But although first-half figures are undeniably grim, the true picture is not all bad.

Following its disappointment with the Signet deal, Mr Piasecki decided that if Goldsmiths couldn't grow by acquisition, it would have to grow organically. In January, he placed 1.1 million shares to raise the necessary cash. Rival Signet currently has a far larger retail network than Goldsmiths, but Mr Piasecki is intending to beat Signet at its own game. Six shops have opened already this year and another nine are due for the second half. Twenty shops are scheduled for 1998 and a further 20 for 1999.

The cost of opening these new shops is one reason why first-half figures look poor. The other is that Rolex, an important source of revenue for Goldsmiths, reduced retail margins. The expansion programme should help to reduce Goldsmiths' historical dependency on Rolex as very few of the new shops are earmarked to carry this luxury line. Goldsmiths' burgeoning insurance business and a new deal with Harrods to run its diamonds department are further reasons to think that the company's prospects look bright.

Forecasts from Charterhouse Tilney put Goldsmiths on a forward price- earnings ratio of about 17, making it look expensive. Luxury watch distributor Time Products, which announced a small increase in profit yesterday, are sitting on a p/e of about 9.

But given prospects at Goldsmiths, it might be worth hanging on to the shares.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test