In what it is terming a “very challenging retail environment” Sterling Jewelers Inc., operator of approximately 1,401 U.S. stores, including the Kay Jewelers and Jared the Galleria of Jewelry chains, saw same-store sales decline 9.7 percent for its fiscal year 2009, which ended Jan. 31.

According to a company statement released Wednesday, the decline was particularly pronounced in the fourth quarter, when same-store sales dropped 16.1 percent after falling only 6.0 percent in the first three quarters of the
year.

Total sales for Sterling reached $2.5 billion in fiscal year 2009, down from $2.7 billion in fiscal 2008.

On a positive note, the company also reported that U.S. same-store sales for the first seven weeks of the current quarter were down by just 2.7 percent compared to the same period a year ago, with strong Valentine’s Day results. Sterling also said that gross margins for the period were “meaningfully” up.

Commenting on the overall performance of Bermuda-based Signet Group Ltd., Sterling’s parent company, Terry Burman, group chief executive, said while the numbers are not outstanding, Signet stores outperformed many of their competitors.

“Against a very challenging retail environment, we capitalized on the group’s competitive strengths to outperform our middle-market competitors and to successfully execute our strategy of maximizing gross merchandise dollars,” he said.

In the United States specifically, the company stated it is poised to gain market share due to the failure of competitors including Robbins Bros, Whitehall Jewelers, Freidman’s and Christian Bernard Stores Corp.

Due to the challenging retail environment, Sterling has reduced staff at its Akron, Ohio, headquarters by 15 percent over the last 15 months, cutting headcount by about 350 through a mix of attrition and layoffs.

Heading into calendar year 2009, Sterling is embarking on a $100 million savings plan that calls for, among other things, the closure of approximately 75 stores nationwide, with only 15 new locations opening.

As a whole, Signet, which also operates stores in the United Kingdom, reported an 8.2 percent decline in same-store sales in fiscal 2009.

Total sales for the group were $3.3 billion, down 5.7 percent on a constant-exchange rate basis.

http://www.nationaljewelernetwork.com/njn/content_display/majors/financial-reporting/e3i52a5818a20ffa024ee3903e0b24faf48

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