Signet Jewelers Ltd

On January 7, 2016, Signet Jewelers (SIG), the world’s largest retailer of diamond jewelry, announced its broad-based success in the holiday season with revenue of $1.9 billion.

Trends shaping the jewelry industry include Increasing demand for branded jewelry and an increased focus on e-commerce sales.

Tiffany (TIF) disappointed investors with its comparable-store sales numbers in 1Q17. After results were announced, the company’s stock plunged ~9%.

Porter’s Five Forces model suggests that there are five forces that determine the attractiveness and long-term profitability of an industry or a sector.

Tiffany & Co.’s Americas segment includes sales from company-operated retail stores in the United States, Canada, Mexico, and Brazil.

Since it’s a luxury brand, Tiffany & Co.’s products are priced high, with no promotions. Thus, Tiffany products may be out of reach for many customers.

Since 2006, Tiffany’s margins have been on the higher side compared to its peers, including Signet Jewelers and Fossil, in the retail jewelry industry.

Tiffany has been increasing its advertising expenses. In fiscal 2015, it spent $284 million on advertising, marketing, and public and media relations.

Total retail jewelry sales in the US grew at a CAGR of 4.4%, reaching $74.7 billion in 2014. Fine jewelry sales grew at a CAGR of 5%, reaching ~$69 billion.

Signet launched a new collection called Ever Us in October 2015. It’s meant to meet the need for jewelry that represents the bond between two people.

At the end of fiscal 2015, Tiffany had a total inventory of $2.4 billion and inventory turnover of 0.73x, implying potential low sales and excess inventory.

Tiffany & Co. has presences to differing degrees in the Asia-Pacific, Japan, Europe, and Other regions.

Tiffany’s key strategic objectives for growth include expanding marketing communications, opening stores in key markets, and enhancing in-store experience.

Tiffany & Co. is a holding company that operates through its subsidiary companies. The most notable is Tiffany & Company, a jeweler and specialty retailer.

Signet Jewelers’ well-known, exclusive brands aim to influence consumers in their buying decisions. Sterling Jewelers thus provides 32% branded assortments.

Signet acknowledges the value of e-commerce growth and its ability to maximize in-store experiences. Signet has thus integrated its website with its stores.

Signet aims to advance its vertical integration, including the sourcing and manufacturing of rough diamonds, which should help improve its supply chain.

Signet Jewelers operates under three divisions: the Sterling Jewelers division, the Zale division, and the UK Jewelry division.