All that glisters is not gold - or jewellery sales

The owner of Ernest Jones and H Samuel has delivered a blow to hopes of returning to growth in the UK after it revealed that sales slowed over the key Christmas trading period.

Jewellery firm Signet reported a 4.2 per cent fall in UK same-store sales in the last nine weeks of 2010, which represents a worsening performance from the previous quarter when sales were down just 0.6 per cent.

Sales at Ernest Jones and sister chain Leslie Davis were down 5.9 per cent whereas last year they were up 0.2 per cent, and trading at H Samuel declined 2.8 per cent.

The US-headquartered group became the latest retailer to blame the Arctic weather for the decline in sales in the UK, which accounts for about a fifth of its total revenues.

Sales declined despite the average price paid for an item of its jewellery having increased 4.9 per cent to 81 compared with a year ago, driven by gold prices up a third in the year.

Its UK business reported strong demand for gold rings and charm bracelets, which it introduced last year and are cheaper than most of its ranges.

The retailer has a total of 544 stores in the UK having shut ten outlets in the past year.