(IDEX Online) - Signet Jewelers Limited reported that same store sales declined 5.2% in the fourth quarter and declined 5.3% in full year fiscal 2018.
It expects to close more than 200 stores following an evaluation of its real estate footprint, utilization, and cost structure, aiming to "reposition its portfolio to drive greater store productivity".
"Signet anticipates, pending the outcome of this evaluation, to close more than 200 stores by the end of Fiscal 2019. As approximately three-quarters of stores expected to close are within the same mall as another Signet banner, the company expects approximately 30 percent of revenue from closed stores to transfer to remaining Signet stores."
The firm announced fiscal 2019 guidance for same store sales down to low-to-mid single digits, with total sales of $5.9 billion -$6.1 billion.
The jeweler announced the second phase of credit outsourcing in an agreement to sell the remaining, non-prime portion of its accounts receivable for proceeds of $401 million - $435 million to investment funds managed by CarVal Investors with proceeds used to fund share repurchases of approximately $475 million.
It said it is implementing a "Signet Path to Brilliance" transformation plan to improve long-term operational and financial performance.
"Fiscal 2018 was a challenging year for Signet," said Signet Jewelers Chief Executive Officer Virginia C. Drosos. "We gained sales momentum in our Zales banner in the fourth quarter as our strategic initiatives began to take hold, but we experienced challenges at our Kay and Jared banners, including execution issues related to the first phase of our credit outsourcing transaction."
"Today we are announcing a three-year company-wide comprehensive strategy to reinvigorate Signet and transform the company to be a share-gaining, OmniChannel jewelry category leader. Our 'Signet Path to Brilliance' plan will advance our strategic priorities across our Customer First, OmniChannel and Culture of Agility and Efficiency pillars. Plan initiatives build on the strength of the Signet banners and focus on 1) investing in eCommerce and product innovation, 2) enhancing customer value, and 3) increasing cost competitiveness. We will also look to further optimize our real estate portfolio through opportunistic reinvestment in innovative store concepts, relocations to off-mall locations, and strategic store closures. Looking ahead, Fiscal 2019 will be an important transition year as we implement our transformation plan, and we expect to see improved operational and financial performance beginning in Fiscal 2020."