There's more in store at Sterling Jewelers than sterling silver. As the largest specialty jeweler in the US, the firm sells gold, silver, diamond, and gemstone jewelry, watches, and gifts from its e-store and more than 1,500 stores in all 50 US states, including nearly 1,100 Kay Jewelers stores in shopping centers and malls, more than 250 off-mall format Jared the Galleria of Jewelry stores, and some 160 regional jewelry stores under other names (Belden, JB Robinson, Marks & Morgan). The jeweler's Jared stores sell diamond jewelry and loose diamonds, as well as luxury watches such as Rolex, Tag Heuer, and Raymond Weil. Sterling Jewelers is the US subsidiary of Bermuda-based Signet Jewelers, the world's largest jewelry retailer.
About 62% of the company's sales came from its Kay branded stores during fiscal 2015 (ended January 31, 2015). Sterling Jewelers' nine regional brands, all founded in the early 1900s, include: J.B. Robinson Jewelers, Belden Jewelers, LeRoy's Jewelers, Rogers Jewelers, Shaws Jewelers, Osterman Jewelers, Goodman Jewelers, Weisfield Jewelers, and Marks & Morgan Jewelers.
The company generated 65.6% of its parent company's (Signet Jeweler's) $5.7 billion in sales during FY2015, as well as 108.3% of its parent company's operating income. Signet Jewelers owns the Zales jewelry brand, a former competitor.
Sterling Jewelers operates stores in all 50 states. Kay is ubiquitous with stores in every state, while Jared has stores in about 40 of them. The jewelry company's 157 regional brand stores operate across 32 states.
Sales and Marketing
The company spent $246.6 million on advertising in fiscal 2015 (ended January), up 6% from the $233.6 million it spent in FY2014.
Sterling Jewelers' annual sales have been rising over the past several years with mid to high-single digit same-store sales (between 4% and 5% per year since FY2013) and a rising store count, which has grown 14% since FY2011, from 1,317 stores to 1,504 stores in FY2015.
The jewelers' sales jumped 9% to $3.7 billion during fiscal 2015 (ended January 31, 2015), with same-store sales rising 4.8%, compared to an increase of 5.2% in the previous annual comparison. The Kay- and Jared- brand stores each posted 9% sales growth on higher branded bridal product sales and higher transaction volumes, respectively, while regional brands suffered a 13% loss during the year with a smaller store count. E-commerce sales rose more than doubled year over year to $283.6 million.
Sterling Jewelers has replaced its historical rapid-growth strategy with a revised plan to position itself as the strongest operator in the US middle market and capitalize on the decrease in competition (many jewelry chains, including Fortunoff, Whitehall Jewelers, and Friedman's have gone out of business in recent years) as the economy regains steam. Indeed parent company Signet's mid-2014 acquisition of Zale Corporation and its famous Zales Jewelry brand greatly increased its US presence while eliminating one of Sterling Jeweler's top competitors.
On the flipside, Sterling Jewelers' regional brand stores in FY2015 continued to suffer from sales declines as consumers have been flocking to its Kay- and Jared-branded stores. As a result, the company has been closing or converting many of its regional stores; its regional store count has by half since FY2013, from 304 stores to just 157 in FY2015. Over the same period, it's increased the number of Jared stores by 30% to 253 stores in FY2015, as Jared stores fetched an average of $4.8 million in sales per store that year -- more than twice that of a Kay store and nearly four times that of a regional store.
In October 2012, Parent Signet acquired Ultra Stores, Inc. from the Chicago investment firm Crystal Capital, expanding its store count in the US. Ulta operated about 110 outlet stores (which were mostly converted to Kay stores in fiscal 2014) in 35 states, as well as 33 Ultra licensed department stores.