Jewellery giant Signet has outlined plans to slash costs and more than halve its debt.
The retailer, which operates fascias including H Samuel and Ernest Jones in the UK and Kay Jewelers in the US, said it will cut costs by $100m (£69.9m) in the US and aims to reduce net debt by $200m (£140m) in the current year. Net debt at the year-end was $470.7m (£329.2m).
Profits before various charges at the retailer, which does two thirds of its business in the US, were $200.9m (£140.5m), in line with expectations. However, Signet made a reported loss before income taxes of $326.5m (£228.4m). Group sales fell 5.7 per cent at constant exchange rates to $3.34bn (£2.34bn) and 8.2 per cent on a like-for-like basis.
Our prime objective is to strengthen the group’s industry leading position
Terry Burnman, Signet
The retailer said that US same-store sales fell 2.7 per cent in the first seven weeks of the new
financial year. In the UK they fell 3.8 per cent.
Signet chief executive Terry Burman said: “As we enter fiscal 2010, our prime objective is to strengthen the group’s industry-leading position so as to be able to benefit from reduced capacity within the speciality jewellery sector and be well positioned for the eventual consumer recovery.”
Investec analyst David Jeary said: “Breaking with tradition, the group revealed a much improved trading performance for the first seven weeks of the new financial year.
“Pressure is expected to escalate over the year on UK gross margin, which is likely to decline over
the full year.”