Signet Plans Store Closures Amid Reorganization

Signet Jewelers plans to close some of its stores and renovate others as it seeks to grow its business.

The company, whose brands include Zales, Kay and Jared, is rolling out a strategy called “Grow Brand Love,” CEO J.K. Symancyk said on an investor call as the company reported fiscal fourth-quarter earnings.

The company has 150 stores that will be evaluated for improvement or closure over the next two years, said Joan Hilson, chief operating and financial officer. And this year, Signet plans to renovate about 200 stores.

Hilson also said that “nearly 200 doors in our fleet have healthy performance, but are in venues that we believe are in decline.” Signet operates about 2,600 locations in all.

“Over the next two to three years, we expect to reposition many of these stores to off mall locations,” she said on the call. “This will also allow us to create an experience in primarily Kaye, Zales, and Jared that aligns to our Grow Brand Love strategy.”

In another component of the new strategy, “we are fully centralizing our sourcing practices to leverage the scale of our buying power and deep market expertise,” Hilson said.

“The newly chartered Signet Diamond Sourcing team will negotiate pricing across our portfolio and improve our agility as a large buyer in the marketplace for both loose diamonds and finished diamond jewelry,” she said.

The strategy also includes “streamlining the organization to speed up decision making and enable an action orientation for our new go-to-market strategies,” Symancyk said, adding: “Our new model includes reducing the number of our senior leadership team members by roughly 30%.”

Symancyk also said the company will “simplify the structure underlying our brand portfolio and services.”

“Organizationally, we will centralize the leadership and operation of Signet’s brands into four distinct customer families,” he said. “First, ‘core milestone in romantic gifting jewelry’ reflecting Kay and Peoples. Second, ‘style and trend’ composed of Zales and Banter. Third, ‘inspired luxury’ made up of Jared and Diamonds Direct. And fourth, ‘digital pure play’ including Blue Nile, James Allen and Rocksbox.

Signet reported revenue of $2.35 billion for the fourth quarter, a bit under the forecast of $2.36 billion. Earnings per share were $6.62, just short of the projected $6.67.