Signet owns Kay Jeweler and Jared Galleria of Jewelry. This is an ADR of a firm based in the UK. 75% of sales are from the US. This retailer may have even more problems than Tiffany's and other jewelers in a protracted, rough economy for a few reasons: 1. Lower-end customer more at risk for unemployment, less discretional income, and significantly impacted by decreasing wealth effect with home price decreases, shutoff HELOC's, etc. 2. Jared appears to have an expensive lease structure for retail locations, judging only from a few extremely prominent market locations I have seen, often paying to take what must be the most sought after location in a high traffic area where everyone can see them. And for all jewelers, rising precious metals prices will either reduce margins, reduce sales (and likely both at the same time) on these discretional, big ticket purchases. I'd be less negative if I saw news of Jared shutting down slow locations. To make matters worse, a weakening dollar means that repatriated US earnings can't be invested well to diversify into more European-based stores. http://news.moneycentral.msn.com/ticker/article.aspx?Feed=AP&...
$12.27 (04/12/08)
