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Signet Makes Inspired Turnaround
The jewelry company has ticked every box in its three-year recovery plan, emerging from the pandemic financially strong and gaining market share.
Jul 8, 2021 4:51 AM
By Avi Krawitz
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 RAPAPORT... Cutting through the corporate jargon that is typical of its earnings reports and strategic plans, Signet Jewelers — under the leadership of CEO Gina Drosos — has a clear vision of its objectives and the role it plays in the sector.
“We want to be — and to lead — the change we want to see in our industry and in the world,” Drosos wrote in the company’s annual report for fiscal 2021, which it published in May.
In addition to outlining the jeweler’s performance during the pandemic, this report summarized the success of the retailer’s Path to Brilliance program, which had just ended, as well as the objectives for its follow-up plan: Inspiring Brilliance. More recently, it has complemented this insight with the release of its sustainability goals for 2030, focusing on its love for people, its team, its products and the planet.
The jeweler has successfully elevated its message and shelved any reputational concerns that might have overshadowed its operations in the past decade. In the 2020s, Signet is being lauded for its inclusivity and diversity. Women account for 58% of its board, as well as 75% of assistant managers and higher management roles. Furthermore, the company’s responsible-sourcing protocols were instrumental in getting the trade to improve disclosure of materials’ origins. Signet is a large enough buyer of diamonds and other resources to exert such influence.
But coming out of the coronavirus crisis, it is the company’s growth strategies that are most noteworthy for the trade. Signet is gaining market share and setting the bar for jewelers in navigating the post-pandemic consumer landscape.
The first of the three pillars in Path to Brilliance focused on understanding consumer habits and ensuring that each of Signet’s banner brands offered a unique value proposition. The second was about strengthening its balance sheet and making the organization more efficient via cost cuts. Thirdly, the retailer wanted to become omni-channel so that it could sell jewelry whenever, wherever and however customers demanded it.
Signet’s first-quarter earnings announcement on June 10 was a telling moment that highlighted the fruits of that strategy. In addition to revealing strong financials — which enabled the company to reinstate its quarterly dividend and raise its outlook for the year — it also ushered in Inspiring Brilliance, which aims to ratchet up annual revenue by improving the company’s offerings even further.
This next growth phase will require Signet to strengthen its flagship brands and the core product categories where they excel — namely bridal, self-purchases and gifting. It will also expand its existing services, such as repairs, and explore new ones like rental subscriptions through its latest acquisition, Rocksbox. Furthermore, the jeweler has identified the mid-tier luxury market and lower-value segment as key growth areas. And, of course, it will continue to invest in digital and omnichannel.
Signet is throwing down the gauntlet for the rest of the industry. It wants to “make the pie bigger and get a bigger slice of the pie,” according to Drosos, whose ambitious target is to grow revenue by more than 70%, from $5.23 billion in fiscal 2021 to $9 billion in the next couple of years.
Notably, the jeweler has the balance sheet to implement the plan.
We explore Signet’s strategies in greater depth in the July Rapaport Research Report. The trade should be aware of how Signet is approaching the market, considering its position as the largest jeweler in the US — if not the world.
The diamond and jewelry industry can piggyback on the company’s success and learn from it. Independent jewelers — and diamantaires, for that matter — must develop their own strategies to differentiate their place in the market. They have strengths that the major chains cannot replicate, and they can compete with a stronger Signet. Doing so will ensure that there is indeed a bigger pie available for the taking.
The Rapaport Research Report presents proprietary data on polished diamond prices, along with market intelligence and analysis. Subscribe to the report here.
Image: Avi Krawitz. (Ben Kelmer); Cover of July Rapaport Research Report. (Shutterstock)
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Tags:
Avi Krawitz, Bridal, diamonds, Fashion jewelry, Gina Drosos, James Allen, Jared, Jewelry, Kay Jewelers, Signet Jewelers, zales
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