The owner of jewelry chains Jared and Kay will permanently shutter almost 400 stores after the pandemic shutdown, adding to the pain for American malls as the company speeds a shift to digital.
Signet Jewelers Ltd., which also owns Zales, will make lockdown-related store closures permanent at more than 150 locations in North America and 80 in the U.K. The company is also in discussions with landlords as it prepares to shut another 150 shops, raising the planned closures to at least 380 this year, or almost 12% of total stores.
The Hamilton, Bermuda-based jeweler joins scores of retailers rethinking their footprint as the economic turbulence of the coronavirus pandemic accelerates the shift away from malls and toward online sales. Chief Executive Officer Gina Drosos is in the middle of a multiyear turnaround plan centered on expanding e-commerce and eliminating poorly performing stores.
"Shopping malls will continue to be an important part of a customer shopping experience, but it'll vary mall by mall," Drosos said Tuesday. The company is using a "hyperlocal data analytics process" to determine which malls are worth staying in.
Signet shares fell 16% Tuesday in New York.
Retailers of all types are taking a hard look at their store networks as they navigate a months-long shutdown of nonessential stores in the U.S. and abroad. As many as 25,000 stores may close permanently this year, mostly in malls, according to Coresight Research. That would be by far the most ever.
All of Signet's 2,800 jewelry stores in North America temporarily shut down in March because of the pandemic. In April, the jeweler, which has about 3,200 locations worldwide, began furloughing employees at stores and support centers to save cash.
As a result, sales fell more than 40% to about $852 million last quarter, the company said Tuesday. Online sales rose 6.7%, including a 55% spike in April excluding a distribution center shutdown, but it wasn't nearly enough to offset the hit from the mass store closures.
Signet has expanded its digital efforts in recent months, including offering live consultations for shoppers at home. It has also held national trunk shows for bespoke merchandise online, rather than traveling to stores around the country.
Signet has reopened more than 1,100 U.S. stores over the past six weeks, with about a quarter offering only curbside pickup. At the fully opened locations, the shopping experience is not quite the same because of coronavirus safety measures. Jewelry is cleansed with alcohol wipes before and after each customer test, and workers wear masks and gloves when appropriate.
"All of us need to see how we come through covid-19," said Drosos. "We want to continue to be agile."