Diamonds give Signet a sparkle

DEMAND for diamonds boosted Christmas sales at jewellery group Signet, which owns the Ernest Jones and H Samuel chains.

More than two-thirds of Signet's sales are made in the US, but its star performer was Ernest Jones in Britain, which pushed like-for-like sales ahead by just over 10% in the eight weeks to 24 December.

Although average transaction values were flat at around £133, more customers came into the stores, chief executive Terry Burman said.

Describing it as a strong performance, Burman said Signet had refused to join much of the rest of the High Street in cutting its prices in the run-up to Christmas.

Margins should be somewhat ahead as a result. For the UK as a whole, underlying sales for the eight weeks were up by 6.7%. In the US, the increase was 6.4%, while total dollar sales were up by 10.4%.

Profits for the year to this month will be ahead of last year's and in line with analysts' expectations, despite the sharp fall in the dollar, which will lop as much as £14m from reported profits.

Analysts expect the group to make profits of about £205m, up from just under £200m the previous year.

In the US Signet, despite comparison with a strong Christmas in 2002, was boosted by improved contributions from its mall stores and the Jared chain.

The retail environment there is improving, although margins are expected to ease as a result of the rise in gold prices.