H.Samuel
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| 2006/07(1) | 2005/06 | 2004/05 | |
|---|---|---|---|
| Total sales (£m) | £260.8 | £256.2 | £281.1 |
| Average sales per store in thousands(2) | £695 | £681 | £723 |
| Average retail price of merchandise sold(3) | £42 | £38 | £37 |
| Total open at the end of the year | 375 | 386 | 398 |
| Total opened during the year | - | 3 | 2 |
| Total closed during the year | (11) | (15) | (11) |
(1) 53 week year.
(2) Including only stores operated for the full financial year.
(3) Excluding accessories, repairs and warranties.
Introduction
H.Samuel is the largest speciality retail jewellery brand in the UK with a market share of some 9% of the total jewellery market. It serves the core middle market customer and has nearly 150 years of jewellery heritage. It sells a broad range of gold and silver jewellery, an increasing proportion of diamond merchandise and a wide selection of watches, including Accurist, Citizen, DKNY, Fossil, Rotary, Seiko and Sekonda. It also sells an increasingly focused range of gifts and collectibles such as Lilliput Lane, Nao and Swarovski.
H.Samuel had 375 stores at 3 February 2007 and is represented in nearly all large and most medium sized shopping centres. An e-commerce capability was launched on hsamuel.co.uk in September 2005 and is meeting its investment target. It is the most visited UK speciality jewellery website according to Hitwise.
Customer service
Customer service is an essential element in the speciality jewellery sector and is a key point of differentiation of H.Samuel. The Signet Jewellery Academy is a multi-year programme and framework for training and measuring standards of capability and, is operated for all store staff. The programme was enhanced during 2006/07 with the launch of ACE, which is designed to improve product knowledge and selling skills; further developments are planned for 2007/08.
Merchandising
In 2006/07 diamond jewellery accounted for 23% of H.Samuel’s sales, up from 17% in 2001/02. This helped increase the average unit selling price to £42 from £31 over that period. Within the diamond category the average selling price increased to £190 (2005/06: £183). Since 2001, sales of gift items, repairs and accessories have declined to 17% of the total from 23% (see Merchandise mix).
During 2006/07 collections of jewellery such as Glitter Sensation, Golden Fire, Rainbow Mist and exclusive lines such as Forever Diamonds, Soulmate and Rotary Rocks were developed to increase the differentiation of the H.Samuel stores and to reinforce the brand perception as a speciality jeweller. Key volume lines to drive footfall were also successfully developed.
Marketing
For Christmas 2006 television advertising was successfully expanded to national coverage for H.Samuel using “H.Samuel helps you say it better” as a theme. H.Samuel was also supported by national press advertising in December.
For most of the year, the primary marketing used by H.Samuel is a series of catalogues distributed as inserts in newspapers and magazines, as well as by mail and available in all stores. During 2006/07 the quality of the catalogues was improved and their distribution better targeted.
Store designH.Samuel stores are undergoing a radical refit that started six years ago. Before then stores were designed for a shopper that made a choice from a window display and who primarily required a cash and wrap service.
The new design allows an increased focus on customer service and greater convenience in presenting merchandise to customers. These factors are particularly important when selling diamond jewellery, central to the strategy of the UK division.
The format uses low level displays, which act as service counters, for jewellery, particularly diamond ranges; wall display cases are used predominantly for watches, gifts and lower value jewellery items. The clear internal lay out by department enhances the ability to provide appropriately trained specialist staff in each area. The refitted stores are much more open and inviting. While the design built on the Group’s US experience, it was adapted to H.Samuel’s merchandising and customer requirements.
In 2006/07 some evolutionary changes to the design were rolled out, having been tested during the previous year. These improved the presentation of jewellery, particularly wall show cases; more clearly displayed branded merchandise such as watches; and made more effective use of in-store signage.
Real estate
H.Samuel returned to its normal seven year refurbishment cycle in 2006/07, with 26 refits and resites, incorporating the design improvements, being completed. Two other H.Samuel stores were also refurbished. At 3 February 2007 217 stores, accounting for some 65% of sales, traded in the more customer focused format.
Up to 20 refits and resites are planned in 2007/08. The conversion programme for H.Samuel is anticipated to be finished in 2009/10. Once the programme is completed, the cost of store refurbishment is expected to reduce significantly as the structural work involved will be much less.
H.Samuel will increasingly focus on larger stores where it is better able to offer more specialist customer service, a wider range of jewellery and benefit from the more customer friendly format. The number of H.Samuel stores is therefore likely to decline in smaller markets as leases expire or suitable real estate transactions become available. Over the last five years there has been a reduction of 53 stores.