Broken window in jeweller’s shop after raid
Signet Jewelers just reported year-end earnings and it was disappointing. Fiscal year 2025, ending Feb. 1, was down 7% from previous year, dropping to $6.7 billion from $7.1 last year. And that comes after revenues declined 12% from $7.8 billion in fiscal year 2023, as CEO J.K. Symancyk admitted in the earnings call, “Growth has been elusive in recent years.”
Because Signet is the world’s top retailer of diamond jewelry and the nation’s largest jewelry retailer, it is a bellwether of what’s happening in the jewelry market. It operates 2,700 stores and e-commerce sites under the name brands Kay Jewelers, Zales, Jared, Diamonds Direct, Blue Nile, James Allen, Banter by Piercing Pagoda and more.
That’s why Signet’s guidance for fiscal 2026 is alarming. Total sales are expected between $6.53 billion to $6.8 billion. That means Signet sales will be off between 13% at the high end of guidance and 16% at the low-end over the last three years.
While the company plans to focus on growing its market share, specifically increasing its 10% share of the $10 billion bridal jewelry market and mid-single-digit share of the over $50 billion fashion jewelry market, Signet apparently couldn’t do that in 2024.
The U.S. jewelry market grew a surprising 5% last year, from $81.3 billion in 2023 to $85.4 billion in 2024, according to the Bureau of Economic Analysis.
However, that is likely to change as affluent consumers, on whom the jewelry industry depends, are showing a growing reluctance to purchase jewelry as they once did.
Confused Picture
It can be argued that the broader jewelry market grew last year due to the continued momentum of luxury jewelry customers, while Signet sales fell because it primarily targets the mass and aspirational consumers, who scaled back their discretionary purchases.
But the answer isn’t as simple as that. Pandora, which competes in the same mass and accessible jewelry segment as Signet, generated 14% revenue growth in the U.S. last year and experienced 8% same-store sales growth.
In the luxury jewelry sector, Richemont, with its luxury Cartier and Van Cleef & Arpels brands, grew a remarkable 15% in the Americas through the third quarter ending Dec. 31 to reach $4.3 billion. However, LVMH’s watches and jewelry group, led by Tiffany and Bulgari, was only able to eek out 1% growth in the U.S. last year to $2.8 billion.
And research firm Tenoris, which surveys 2,000 largely independent specialty jewelry stores for its market tracking, found sales growth last year was a tepid 1% with unit sales down 2%. The jewelry retailers it surveys attract primarily the more affluent shoppers in their communities.
A Look Over The Horizon
“The luxury market in America will undergo significant changes in 2025, driven by shifting consumer preferences, economic factors, and evolving attitudes toward experiences, sustainability, and digital engagement,” warned Chandler Mount, founder of the Affluent Consumer Research Company, with which I am affiliated.
In the realm of consumer goods, jewelry stands out as the most discretionary purchase. Unlike items such as clothing, handbags, or watches, which serve functional purposes, jewelry is purchased purely for its emotional or symbolic value and has not practical use. This means jewelry, regardless of its cost or brand, is the most luxurious of all consumer goods.
So when affluent consumers turn off to jewelry purchases, it’s not a good sign for any jewelry brand or retailer, no matter whether positioned in the mass, aspirational or luxury jewelry segment.
And that’s what is happening. Affluent consumers’ intent to purchase jewelry over the next three months declined from 28% in the third quarter 2022 to 22% at the start of this year, according to the ACRC longitudinal luxury tracking study among affluent consumers with incomes $200k and above.
The ACRC survey sample roughly corresponds to the top 20% of U.S. households, of which there are 26.4 million out of the nation’s total 132 million households. And among those high-income earners, some 6.5 million households are at the top 5% of income, earning $316k or more.
Net/Net: the drop from 28% to 22% purchase incidence means some 1.5 million affluent households have put a hold on new jewelry purchases in any particular quarter, dropping from 7.3 million active buyers in 2022 to 5.8 million most recently.
Mount explains that most affluent consumers buy luxury items quarterly or less frequently, “underscoring that luxury consumption is tied to specific needs, events, or aspirations rather than habitual purchasing.”
Changing Preference For Lab-Grown Diamond Jewelry
In the case of jewelry purchases, those needs are primarily around milestone life events, holiday and occasional gifting. Those occasions aren’t going away, but jewelry brands face cross-currents in that regard.
Lab-grown diamond jewelry is becoming an increasingly attractive alternative to natural mined diamonds, more often for self-purchasing and occasion gifting. However, LGD jewelry is cutting into the industry’s prime bridal market where it has a significant price advantage and a sustainability edge.
According to The Knot, just over half of the engaged couples surveyed in 2024 said their engagement ring featured a LGD center stone and couples spent an average of $4,900 for their 1.7 carat LGD ring, as compared to $7,600 for a mined diamond engagement ring.
Tenoris reports that the increased popularity of LGD is cutting into the traditional jewelry market. Natural diamond jewelry unit sales declined 3% last year, as prices increased 3%. By contrast, LGD jewelry unit sales soared by 43% while the average price decreased 8%.
Experiences Over Things
In addition, luxury consumers are increasingly choosing to indulge in experiences over material goods and jewelry is caught in that crosswind too. “Consumers increasingly prioritize experiences like travel and dining over physical goods, reflecting a cultural shift toward meaningful, memory-driven consumption,” Mount said.
So instead of choosing jewelry for an anniversary, birthday or holiday gift, consumers might choose a memory-making experience like a cruise or luxury resort stay. And for that all-important wedding event, the dollars saved on a LGD ring leaves more money to spend on the honeymoon.
Economic Headwinds
Hanging over the entire luxury market are questions about the economy. Mount notes that affluents feel personally stable or better off financially, but they are less optimistic about the broader U.S. economy. This is resulting in more cautious spending, particularly in highly discretionary categories such as jewelry.
Avoiding The Downward Pull
Based on Mount’s assessment the jewelry market, even at the luxury high-end, is poised to experience a “notable” contraction, more so if the economic outlook doesn’t improve.
“This jewelry market decline is attributed to several factors, including increased competition from lab-grown diamonds, changing consumer preferences, and economic challenges,” he said, adding that the trend toward more experience-driven purchases is changing the dynamics in the jewelry industry specifically and the luxury market in general.
“While consumers still appreciate quality and authenticity, they are placing greater importance on experiences and ethical practices. Luxury brands must adapt to these evolving preferences, by emphasizing jewelry’s inherent value and meaning to build stronger connections with their current and target customers,” he concluded.
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