Technical difficulties during the fourth quarter with its e-commerce sites have led Signet Jewelers Ltd. to invest in upgrades so that its sites are performing at peak by Mother’s Day.
Signet, No. 122 in the Internet Retailer 2016 Top 500 Guide, reported online sales during the fourth quarter of fiscal 2017 ended Jan. 30 of $161.8 million, down 2.7% from $166.3 million during the previous year. For all of fiscal 2017, online sales grew to $363.1 million, up 1.0% from $359.6 million the previous year.
In January, Signet blamed a holiday season (November-December) sales decline of 2.4% on its Sterling Jewelers online store, saying that site changes to that e-commerce site earlier in 2016 interfered with performance when traffic spiked during the holidays. CEO Mark Light says those performance issues continued throughout the fourth quarter. Signet also owns the Kay, Jared, and Zales jewelry brands.
“Sterling e-commerce enhancements did not perform to expectations when exposed to the high fourth quarter volume, resulting in purchasing disruptions,” he told analysts on the jeweler’s Q4 2017 earnings call, according to a transcript from Seeking Alpha.
Keeping the holiday issues top of mind, Signet is spending money to upgrade its online stores to ensure its sites can handle the expected spike in traffic around Mother’s Day (May 14 this year), one of its busiest times of the year. Signet did not specify which vendor they are using on the call.
“Technical enhancements have begun and will continue for the next few months,” Light said. “For example, we expect page load speeds to be cut into half as compared to the holiday season,” and those changes will be in place by Mother’s Day, he said.
On the call, the retailer also responded to sexual harassment allegations. Signet is in the process of reviewing its policies after allegations of sexual harassment and gender discrimination roiled the retailer and sent its stock plunging earlier this month. The retailer is forming a new board committee that will include all its female directors and will be chaired by a woman. The move follows explosive allegations about Signet’s corporate culture that surfaced in a Washington Post story in late February. The assertions stem from a complaint filed in 2008, but hundreds of pages of documents weren’t made public until last month.
About 250 former employees of Signet’s Sterling Jewelers unit gave statements as part of the complaint, depicting a company with unequal pay and raucous parties where employees were harassed. In February 2015, an arbitrator certified a class of about 69,000 current and former female employees in the case, allowing them to proceed in arbitration with the claims.
“The portrait of Signet painted in recent media reports is irreconcilable to me with a company that I served as a director and a chairman for (for) more than five years,” chairman of the board Todd Stitzer said, according to Bloomberg. “We have taken seriously the allegations of sexual harassment prepared in connection with the pending arbitration matter, many of which go back decades. The allegations of sexual harassment focused on our leadership were denied under oath.”
- Total sales of $2.270 billion, down 5.1% from $2.393 billion in fiscal Q4 2016.
- E-commerce accounted for 7.1% of total sales during the quarter, compared to 6.9% the previous year.
- A same-store sales decline of 4.5%, compared with a 4.9% gain.
For fiscal 2017, Signet reported:
- Total sales of $6.408 billion, down 2.2% from $6.550 billion in fiscal 2016.
- E-commerce accounted for 5.7% of overall sales, compared to 5.5% the previous year.
- A same-store sales decline of 1.9%, compared with a 4.1% increase.
Bloomberg News contributed.Favorite