Deep discounting by independent jewelry, especially on lab-grown, impacted Signet’s average transaction value in the fiscal fourth quarter that ended February 3, Drosos explained.
The retailer’s sales fell 6% year on year to $2.5 billion during the period, it reported Wednesday. The average transaction value slipped 0.6% in North America and slumped 10% in other regions as the jeweler sold some of its prestige watch locations.
“I think that consumers are becoming more aware that lab-created diamond prices are falling,” Drosos said on the call following the earnings release. “And so while they might be great for fashion jewelry, there’s something very, very rare and individual about a natural diamond. And so we think that that is a potential tailwind for natural diamonds in the year ahead.”
Signet’s lab-grown sales are in the “teens percentage” of total group revenue, she added. With the US economy still challenging, Drosos noted an opportunity to expand its focus on low-cost fashion jewelry, an area to which it currently has little exposure. Its main banner in that segment is Banter, formerly Piercing Pagoda.
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