Kay Jewelers, Zales parent to close 150 stores after weak holiday sales
The parent company of Kay Jewelers, Zales and Jared on Wednesday said it would close more than 150 stores this fiscal year after reporting poor results during its holiday sales season.
Signet Jewelers said same-store sales at brick-and-mortar locations fell by 2 percent in its fourth quarter of fiscal 2019 amid weak demand and declining customer traffic at locations located in shopping malls. The company also closed 262 stores in fiscal 2019 as part of a strategy that includes an increased focus on e-commerce.
“We made progress on our Path to Brilliance initiatives, achieving double-digit e-commerce growth, delivering $85 million of net cost savings, and continuing to optimize our store footprint," Signet Jewelers CEO Virginia Drosos said in a statement. "However, we did not finish the year as strongly as expected due to a highly competitive promotional environment, continued consumer weakness in the UK, and lower than expected customer demand for legacy merchandise collections that impacted our holiday fourth quarter results."
The company said store closures will “increase store productivity and allow for more focused, impactful investments” in digitally-focused location designs. Signet will also open some new stores “primiarily consisting of repositions to off-mall locations.”
By the end of fiscal 2020, Signet said it will have reduced its total number of stores by 13 percent over the last three years. The company expects net savings related to store closures of between $200 million and $225 million.
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Traditional brick-and-mortar retailers have struggled to maintain sales in recent years amid the rise of e-commerce competitors such as Amazon, causing a wave of store closures and bankruptcies among legacy brands.