Signet's move into selling jewelry online yields strong holiday results, CEO says
- Signet Jewelers shares surged 6% after the company disclosed preliminary results for its latest fiscal quarter Thursday, showing a strong online performance during the holiday shopping season.
- "Our team has done an amazing job bringing new technology so that we can unlock the selling of jewelry online," powered by online consultation and visualization capabilities, CEO Virginia Drosos told CNBC's Jim Cramer on Thursday.
- The company's newly launched order online, pick up in store service was the big driver over the holiday period, she said.
Signet Jewelers, a giant in the diamond industry, had a breakout quarter for its online business last quarter with the help of investments made to reach customers through different channels.
The jeweler, as part of its transformation strategy, has closed hundreds of brick-and-mortar stores in the past year and put more emphasis on its web services, yielding a 60% increase in e-commerce sales during the holiday shopping season, CEO Gina Drosos told CNBC's Jim Cramer on Thursday.
Shares of the retailer rallied 6% during the session after it disclosed preliminary results, including same-store sales growth of 5.6%, from the nine-week period ending Jan. 2.
"Our team has done an amazing job bringing new technology so that we can unlock the selling of jewelry online," Drosos said in a "Mad Money" interview.
Total sales for the holiday season were $1.8 billion, about in line from a year ago, the company said in a press release.
As part of its "Path to Brilliance" transformation over the past three years, Signet, which owns brands including Kay, Jared, Piercing Pagoda and Peoples, has spent money on data and analytics to provide an online experience to jewelry shoppers.
Jewelry retail has been among the last in the retail industry to adopt a robust web presence.
Signet has beefed up its consultation and visualization capabilities on the internet, giving clients a way to establish a relationship with hundreds of online salespeople and examine products before purchasing, Drosos explained.
"We can chat with people online, we have AI enablement on all of our online information, but we also have people. We have 700 virtual sellers who can help them," she said. "We are now showing our jewelry in ways that help customers understand how big it is, how it will look on me — will it be right?"
While Signet's online presence remains nascent, the digital approach is also offering the company new opportunities in fulfillment, Drosos added, including launching in-store pickup for online orders last October.
"It was the big driver over our holiday period," she said.
As the company wades deeper into data and analytics to target and sell to customers, Signet has cut down its footprint. Signet had less than 2,900 physical stores as of early January, reflecting a 4% reduction in its store count. In the fiscal year that ended Jan. 2, the company shut down 355 of the 380 locations it planned to close, notwithstanding the coronavirus pandemic, as part of its transformation plan.
Signet has moved away from lower-traffic shopping malls, emphasizing an off-mall approach that includes areas with more robust traffic and sales profiles, Drosos said.
"We've now mapped the country and looked at where jewelers should be … and we see opportunity for that also in the times ahead," she said.
Shares of Signet closed at $41.39 on Thursday, up nearly 52% from the start of the year. In 2020, the stock rose more than 25%.
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