Signet Jewelers Limited, the world's largest retailer of diamond jewelry, said last week that it's planning to close 150 underperforming stores during its current fiscal year and that by fiscal year's end it plans to reduce its store base by 13 percent over a three-year period, according to a company press release. Signet, which has 3,300 stores under the name brands of Kay Jewelers, Zales, Jared the Galleria of Jewelry, H.Samuel, Ernest Jones, Peoples, Piercing Pagoda, and JamesAllen.com, also plans to have "limited new store openings" in FY 2020, primarily consisting of "repositions to off-mall locations." The news came as Signet reported that its fourth quarter revenue fell to $2.15 billion from $2.3 billion in the year-ago quarter, and its operating income decreased $83.5 million from profit of $323.5 million a year ago, the company said.
Total Retail's Take: Signet Jeweler watchers weren't surprised by the news. Last March the company announced a three-year "Signet Path to Brilliance" transformation plan that it said was intended to "reposition the company to be the omnichannel jewelry category leader." This plan was "designed to enhance the company’s cost competitiveness while providing a source of funding for future growth initiatives," and was to include "procurement savings in merchandise and indirect spend; consolidation of facilities; and payroll savings as a result of implementing simplified organization structures." If all goes as planned, the transformation plan will deliver $200 million to $225 million of net cost savings in FY 2019-2021. Therefore, it's no surprise that Signet continues to strategically reduce its real estate footprint by unloading its worst-performing stores. In fiscal 2019, the company closed 262 stores.