Shine fades on jewellery sales

H Samuel and Ernest Jones parent Signet said today that sales in its UK and US markets dived in recent weeks as consumer confidence tumbled on both sides of the Atlantic.

The group saw third quarter UK sales take a turn for the worse in the last three weeks as the economic downturn and global financial crisis took hold, dropping by 8 per cent on a same-store basis.

In the US, where the group trades as Jared the Galeria and Kay Jewelers, like-for-like sales plunged by around 11 per cent in the seven weeks to November amid "heightened consumer uncertainty".

The sudden fall in sales dragged overall third quarter performance down, with group-wide like-for-like sales down 6.6 per cent to 629.4 million US dollars (£395.1 million).

Ernest Jones was the worst-affected UK brand, with like-for-like sales down 3.3 per cent, while H Samuel suffered a 1.6 per cent fall.

Signet, which switched its main stock market listing to the US in September, had seen sales in the UK grow by 2.3 per cent in the first half of the year, boosted by higher gold prices and strong demand for watches.

Terry Burman, group chief executive of Signet, said: "In a very difficult trading environment on both sides of the Atlantic, we have a strong business which we continue to manage cautiously.

"Our focus is on maximising gross margin dollars, a tight control of costs and inventory, as well as maintaining strong balance sheet."

Sales in the group's year so far - the 39 weeks to November 1 - are down 4.3 per cent to 2.22 billion dollars (£1.39 billion) - a 1.6 per cent decline when currency movements are stripped out.

Signet has 1,991 stores in total, of which 560 are based in the UK, where it also runs the Leslie Davis chain.

It has opened 18 stores since the half-year stage and has plans to increase its US store space by around 4 per cent during the current financial year, although the group has eased capital expenditure back to around 60 million US dollars (£37.6 million) in the tighter climate.