Jewellery retailer Signet reported that an improvement at its Ernest Jones chain has helped it achieve almost flat UK like-for-like sales in its third quarter to October 31.

Signet finance director Walker Boyd said: “Ernest Jones, at the upper end [of the market] suffered the most earlier in the year, but that customer has seen an improvement compared with the
H Samuel customer.”

Group like-for-like sales were down 1.9% and despite an improvement on the second quarter Boyd said that the “jury was still out” on Christmas trading. “We have seen an improving trend but, having said that, the prospects for the economy remain uncertain,” he cautioned.

The retailer has been taking advantage of softness in diamond prices but as gold prices increase there would continue to be an effect on gross merchandising margin.

Signet, which does two thirds of its business in the US, said it was best placed in the jewellery sector to “take advantage” of recovery. In the US, about 12% to 14% of competitors have exited in
terms of space, providing an opportunity for Signet to grow market share. Investec analyst David Jeary said that Signet “remains one of the best managed retail groups in our coverage universe, and thus should be able to benefit from self-help measures, capacity withdrawal in the industry and any potential improvement in the consumer environment”.