Diamond price dip helps deliver sparkling results for jeweller

Published on Thursday 5 November 2009 20:34

CHEAPER diamond prices helped H Samuel and Ernest Jones to deliver positive third-quarter sales, as consumers snapped up more affordable gems, parent company Signet yesterday said.

The group, which also operates under the Leslie Davis brand, reported a narrowing in same-store sales declines to 0.2 per cent in the 13 weeks to 31 October, compared with a 4.3 per cent plunge in the previous three months.

Ernest Jones put in a "noteworthy" performance, reversing a 6.2 per cent drop in the second quarter to a fall of 0.3 per cent in the third, the group said.

Signet said a tentative recovery in consumer confidence added to higher sales of diamonds as revenues improved.

The group has been able to use its buying power to take advantage of cheaper diamond prices this year. The slight shift in the sales mix towards diamond products rather than gold contributed to an increase in average selling prices of 9.2 per cent at H Samuel and 4.7 per cent at Ernest Jones in the first half.

Despite the better third-quarter result, the retailer cautioned over the trading outlook.

Walker Boyd, group finance director at Signet, said: "Consumer confidence is perhaps becoming a bit more stable, but whether that can continue is where we have to be cautious."

The group said it was "well prepared" for the Christmas selling season. Boyd added: "We recognise consumers are looking for good value, and we'll very much cater for that."

Signet has 554 stores across the UK, while in the US it largely trades as Kay Jewelers and Jared the Galleria of Jewelry.

The US arm – by far the biggest in the group, contributing three-quarters of total revenues – also narrowed sales declines, to 2.4 per cent in the third quarter from 5.5 per cent in the second quarter.