IDEX Online Research: Signet’s New CEO Outlines His Priorities

(IDEX Online News) – Mike Barnes, Signet Jewelers’ new CEO who has been on the job for just a few months, took the opportunity to “set out our priorities” on a recent conference call with Wall Street analysts.

The key priorities he mentioned are listed below. We expect to see more detail about these priorities in the coming months.

·         Existing business – Barnes said that the existing business is in “great shape and performing strongly.” He said that management will support the strategies that have made those businesses successful. Further, management will accelerate the rate of investment in stores and other initiatives to improve the company’s competitive position. There have been rumors that Signet’s U.K. division was for sale; we heard no hint of this in Barnes’ remarks.

·         Technology – Management is looking at opportunities to invest in growth of enabling technologies such as the internet and customer-assisted selling systems. As an example, Barnes said that while the company’s websites are competitive, he expects that significant improvements will be made over the next few years.

Barnes also talked about the opportunity to develop the use of virtual inventory. He did not elaborate on this point, but it could be important in the future.

·         New stores – While the company has increased its new store openings in the U.S. to 25 this year from six units last year, Barnes said “we are ready and willing to increase it substantially further” when the company can obtain suitable real estate.

·         Brands – Barnes said that the jewelry industry is undergoing “structural change,” driven by branded merchandise. He sees a move toward branded jewelry and a move away from “undifferentiated commodity” goods. He noted, “People really love brands.”

Not only do branded and proprietary goods create a competitive differential for retailers, but there is an opportunity to generate higher margins from these goods.

·         Possible Investments – Barnes said, “It’s our intention to be opportunistic where there are possible investments that satisfy our . . . return hurdles and fit within our core competencies. These may be potential new opportunities in the supply chain, untapped markets or even new store formats.” We’ll be watching this priority closely.

Signet gained its position as an industry leader under prior CEO Terry Burman. Barnes clearly plans to take Signet – and Sterling – to the next level. The industry has much to learn from a successful operation like Signet.