After a disappointing 2019, when jewelry store retail sales were basically flat from the year before–$32.2 billion compared to $32.4 billion in 2018–the new year 2020 started with a bang. January 2020 sales rose 11.2% over previous year and hopes were high that similar growth would continue for the rest of the year.
Then Covid hit, and the industry’s hopes were dashed. But it wasn’t just store closures that killed the jewelry business.
Throughout most of 2020, buying jewelry was just about the last thing on people’s minds. Sure, there were birthdays, anniversaries, engagements and weddings that necessitated a visit to the jewelry store or website. Still, many people felt it inappropriate to indulge in such an extravagant, luxurious purchase when so many others were suffering a financial crisis.
Jewelry retailers didn’t go into holiday 2020 with expectations business would turn around. A pre-holiday survey conducted by Nielsen and The Conference Board found jewelry was at the bottom of people’s gift lists for increased spending. The results forecasted jewelry “will experience [a] major decline.”
That was confirmed when Mastercard’s post-holiday SpendingPulse reported jewelry sales were off by 4.3%.
Signet’s strong holiday sales
So it was a surprise when Signet Jewelers announced that during the nine weeks ended January 2, 2021, its holiday season same-store sales rose 7.8% in North America, the company’s best holiday sales performance in nine years. Signet is the nation’s largest jewelry retailer with over 2,400 locations under Kay, Zales, Jared, Peoples, James Allen, Piercing Pagoda and a variety of mall-based brand names.
While that growth reflected a 57.5% increase in e-commerce sales, the fact that brick-and-mortar sales were off just a shade indicated jewelry stores are no longer on people’s “do not enter” list.
Signet’s strong holiday performance puts it into position to narrow the gap it experienced earlier in the year. It ended third quarter with year-to-date sales off by 20.4% from previous year – $3.1 billion compared with $4 billion.
But by the close of fiscal year 2021, sales should be down only about 16%, ending with total revenues between $5.1 to $5.2 billion compared with FY2020’s $6.1 billion. North America accounts for over 90% of corporate sales, with the international segment declining for the past two years.
As is standard practice in corporate America, the company shared a note about holiday results filled with corporate-speak, a.k.a. gobbledygook – omnichannel capabilities, visualizations, virtual shopping and all kinds of enhanced and optimized experiences.
Thankfully, Signet’s CEO Virginia ‘Gina’ Drosos offered to cut through the haze and give me the straight story. And what a story it is.
She joined Signet’s board nine years ago, then became CEO in 2017. Shortly thereafter, she put into place a strategic turn-around plan called “Path to Brilliance.”
“The holiday results demonstrate that our multi-year transformation strategy is working,” she asserts, adding that the technology platform established under the “Path to Brilliance” plan enabled the company to pivot under Covid.
“We attracted new customers, drove higher conversion rates and increased our marketshare, positioning us for the long term,” she continues.
But Drosos humbly takes little credit. “It’s a testament to the agility of our team to adopt new skills to serve customers in new and different ways. It takes courage to change how you work so dramatically in such a period of time. Our team has done that,” she says.
Business of love
Yes, the story of Signet’s success is one of Drosos’ corporate prowess – financial restraint, inventory management, new products, digital improvements and rapidly adopting ways to responsibly and safely service customers in a social-distance world. Her nearly 10 years at P&G provided that, as she exited as global president of global beauty care, managing 20+ brands, 22 manufacturing plants and more than 6,000 employees proves that.
She followed P&G with a four-year stint as president/CEO of an entrepreneurial, purpose-oriented health technology company. Here she pursued a personal mission that aligned perfectly with that of Signet’s: to “Celebrate Life and Express Love.”
”We’ve done equally as much work on transforming our culture as our strategy,” she says. “I wanted us to act like entrepreneurs, to be innovative and agile, try new things and not to have a top-down culture. We exist to inspire love and to help customers celebrate their love.”
She and her team, which is remarkable for its diversity, are purpose-driven to “unlock the opportunity for all people in our company to bring their full selves to work. I’ve always seen diversity as a business strategy, not an HR statistic,” she affirms.
But those statistics are impressive, starting with Drosos, who is one of only 37 female CEOs of a Fortune 500 company, a mere 7.4% of the total.
“We’re one of the few public companies that has a woman CEO and CFO on its earning calls,” she states. “More than half of our C-suite leader team are women. Half of our board members are women, over 70% of our store managers are women and about three-fourths of our total employee base is women. And Signet has been honored by Bloomberg Equality Index two years in a row.”
Women know what women want
For a jewelry company which primarily targets women, who knows more about what women want than women?
“The fascinating thing when you spend time with customers is that people can point to every piece of jewelry that they’re wearing and tell you about when they got it. It’s your life story that you wear. It’s imbued with meaning. You look in the mirror and you see your 10th anniversary, your college graduation or your first baby.”
Drosos points to the ring she is wearing, part of Kay’s “Everything You Are” diamond collection, with five different shaped diamonds that signify the many different facets of a woman’s life. “This has been a big gift this holiday, particularly for working moms who’ve been the heroes in this period having to manage working from home and homeschooling.”
Particularly gratifying for Drosos is how Signet has given her the opportunity to manage a business all the way through to the customer. “As I came into this CEO role, I wanted to put the customer first, to understand the customer journey and to delight our customers with technology and product,” she explains.
She understands that retail is first and foremost a people not a product business. For Signet whose business is love, the people in the company have to love what they do and show love to the customers they are serving.
That is the road map for the “Path to Brilliance” that Drosos is using to guide the company. “When someone feels love, they feel emboldened to go change the world. We are selling these mementos that say ‘I am loved,’ and with that, they can stretch and change the world,” she concludes.