The company’s UK sales have consistently lagged behind its more successful US business, where it operates 1,317 stores across its Kay, Jared and regional brands facias. The US market is beginning to recover from the recession and in the Fiscal year 2011 its US sales rose 8.9% to €1,9bn ($2,744.2m) and accounted for 79.8% of its global sales, while the situation has remained more challenging in the UK market, which accounts for just 20.2% of its global sales. Its UK business saw a sales decline of 5.5% to €485m) $693.2 million in the same period, and the retailer has already revealed that it will continue to focus on prime locations and close 22 stores in this financial year.
|Signet's Ernest Jones store in Derby, England.|
Despite these difficulties it’s not all doom and gloom and there is evidence of the returning strength of high-end watch and jewellery sales. French luxury goods group LVMH reported a recovery in its watches and jewellery business in the first quarter of this year, resulting in organic growth of 20% to €261m ($372m) in the segment, while the newly LVMH-acquired Bulgari also reported strong first quarter results. The Italian luxury goods group saw a 21.9% increase in its watches business and growth of 29.3% in its jewellery segment, while its turnover increased 27.5% to €254.7m ($363.3m).
Clearly the European market remains difficult and watch and jewellery demand is a long way off from pre-recessionary levels. But despite the latest retail figures suggesting the market remains flat the experience of Europe’s high-end jewellers show that consumers in the region are gradually gaining in confidence. Companies that are looking to invest in the European market should be aware that consumers in the region may be shopping less frequently and buying in smaller volumes, but when they do spend they are willing to pay more for quality high-end watches and jewellery that will last them beyond this year and next.