Signet Group, the world’s largest specialty retailer reported a group like-for-like sales drop of 0.7 percent for the fiscal year ended February 2. Total sales were up 3 percent to $3.67 billion. This is the group’s first annual decrease in like-for-like sales since the 1992/93 fiscal year.

Operating profit fell by 15.9 percent at constant exchange rates on a 52-week basis, while the reported decrease was 15.6 percent to $351.3 million.

In the U.S. market, which represents 74 percent of the group’s operations, like-for-like sales were down 1.7 percent, and operating profit dropped 19.6 percent on a 52-week basis. During the first nine months of the year, sales growth slowed to 2.7 percent, and “the gift-giving events of Valentine’s Day and Mother’s Day [were] disappointing,” the earnings release stated.

In the UK, like-for-like sales were up 2 percent, with stores H.Samuel and Ernest Jones posting growth of 1.3 and 2.9 percent respectively.

As for divisional figures, Kay strengthened its position as the number one specialty brand with sales of $1.49 billion, 40 percent more than the number two middle-market specialty brand, while Jared sales were up 13.8 percent to $756.4 million.  

According to CEO Terry Burman, “2007/08 was a very demanding year for the group, with a particularly difficult fourth quarter,” confirming what many in the jewelry industry are also feeling.

“While the U.S. business saw an unprecedented weakening in sales over Christmas, and faced the impact of commodity cost increases, it continued to be a leader in setting industry operating standards. In a tough UK retail marketplace, like-for-like sales were ahead and operating margins, cash flow and return on capital remained strong.”

“The outlook remains very challenging on both sides of the Atlantic,” Burman concluded.