Signet Jewelers Ltd.’s recent acquisition of competitor R2Net has had a major impact on its overall online fortunes.
Signet, No. 113 in the Internet Retailer 2017 Top 500, reported online sales of $80.7 million during its third quarter of fiscal 2018 ended Oct. 28, up 56% from $51.7 million during the same time last year. E-commerce accounted for roughly 7.0% of Signet’s sales during the quarter, compared with roughly 4.4% last year.
Signet bought R2Net, parent company of fast-growing competitor JamesAllen.com (No. 140) for $328 million in late August. Chief financial officer Michele Santana said that even in those few months, the R2Net acquisition has helped significantly.
“Excluding the 47 days of sales related to R2Net, [Signet’s] e-commerce growth was 10.5% [year over year] and represented 5% of sales,” she told analysts on the call, according to a transcript from Seeking Alpha. “We saw strong growth in our Kay and Jared digital sales, driven by the number of enhancements we have made to our sites combined with investments in digital marketing.”
Signet CEO Gina Drosos said the retailer made it a priority in the quarter to link its physical stores to the online stores in its Sterling Jewelers division, which includes Kay Jewelers and Jared the Galleria of Jewelry retail chains.
“This includes the ability to search for inventory in local stores; online appointment booking to meet with a diamond consultant in a store; a proactive live chat functionality; and the omnichannel ‘bag’, which links the products customers add to their cart online or view in-store into one virtual shopping bag that can be accessed anywhere,” Drosos said.
The retailer’s progress on social media is encouraging, she said, noting that the company has generated 1 billion impressions across multiple social media channels so far this fiscal year.
“Our social media efforts are proving highly effective, with three times the number of impressions per invested dollar than traditional media, while allowing us to deliver more targeted and personalized messages,” Drosos said. “We’re reaching people five times more likely to be married soon than through traditional marketing efforts.”
Because the retail group’s digital marketing strategies are proving effective, digital advertising will account for 30% of Signet’s fourth quarter ad spend, compared with 19% during the same time last year,she said.
For the third quarter of fiscal 2018 ended Oct. 28, Signet reported:
- Net sales of $1.157 billion, down 2.4% from $1.186 billion during the same time last year.
- A net loss of $3.9 million, compared with a profit of $17.0 million.
- Same-store sales, including e-commerce, declined 5.0%.
For the first nine months of fiscal 2018, Signet reported:
- Net sales of $3.960 billion, down 4.3% from $4.139 billion during the same time last year.
- Net profit of $168.0 million, compared with $245.7 million.