Blog Coverage Luxury Jewelry Chain Birks Group's Hits the Holiday Bonanza
Upcoming AWS Coverage on Tiffany
LONDON, UK / ACCESSWIRE / January 17, 2017 / Active Wall St. blog coverage looks at the headline from Montreal, Canada based Birks Group Inc. (NYSE: BGI) as the Company announced in a statement dated January 12, 2017, that the recent holidays boosted its sales across its stores in the US and Canada. The season resulted in an 11% increase in comparable store sales, on a constant exchange rate basis. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
One of Birks Group's competitors within the Jewelry Stores space, Tiffany & Co. (NYSE: TIF) is forecasted to deliver better-than-expected holiday results. AWS will be covering this stock as it breaks news.
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The Company reported an increase of 11% in the comparable store sales for the period from October 30, 2016, to December 31, 2016, compared to the sale during the holiday season last year which was from November 01, 2015, to January 02, 2016. The US-based comparable store sales had increased by 16% while Canadian-based comparable store sales grew by 3%. The increase in sales was attributed to the increase in average spend per shopper and converting store visits into purchases. The news is also significant given that most other retailers similar to Signet Jewelers had reported disappointing holiday season results with 5.1% dip.
Excited by the news, Jean-Christophe Bédos, President and CEO of Birks Group, commented:
"We are very pleased to see that the continued execution of our sales growth strategies has led to a record year in terms of holiday sales. These results were driven by our focus on our Birks-branded products, our marketing campaigns as well as our continued dedication to enhancing customer experience."
Birks' business is concentrated on two principal product categories - jewelry and timepieces. It designs, develops, makes and retails fine jewelry, timepieces, and gift wares. It also offers jewelry repair and custom design services. Its Canadian stores operate under the Birks and Brinkhaus brands whereas its US stores operate under the Mayors brand. It also operates a store under the Rolex brand in the US. As of January 2017, Birks has 26 stores in Canada and 17 stores in the US.
Birks long-term sales strategies produce results
Birks embarked upon a plan to revamp its merchandising and marketing strategies to increase its sales and improve its gross margins. The Company focused on regional and national advertising campaigns utilizing digital channels billboards, print, direct mail, magazine, in-store events, community relations, media relations etc. Birks worked on strengthening its partnerships - Mayors' with Rolex and Birks' with Van Cleef & Arpels. Birks took steps to improve its distribution channels as well as ecommerce based sales. The Company improved its overall customer service by providing outstanding customer service and customers' in-store experience.
The Company's sales were being affected due to the low margins in the timepieces business as well as selling off discontinued product brands at huge discounts. The Company changed its merchandising strategy by developing and marketing exclusive and unique third-party branded products with higher margins and promoting the Birks product brand. In its efforts to improve efficiencies and increase profitability, in some cases, the Company took the extreme step of closing down unproductive stores.
According to the Company's annual report for 2016, it had earmarked $6.7 million as capital expenditure for fiscal 2017. Birks expects to invest 39% of the capital expenditure for the US-based business and the remaining 61% of the capital expenditure for the Canada-based business. The capital expenditure was aimed at store remodels, store relocations, and implementation of a new ERP program.
All of these efforts seems to have paid off handsomely and can be seen in the increased retail store sales, average retail transaction conversion rate, and increased profitability.
Stock Performance
At the closing bell, on Friday, January 13, 2017, Birks Group's stock dropped 5.51%, ending the trading session at $1.20. A total volume of 149.89 thousand shares were traded at the end of the day, which was higher than the 3-month average volume of 132.67 thousand shares. In the last month and previous twelve months, shares of the Company have surged 11.11% and 185.71%, respectively. Moreover, the stock gained 12.15% since the start of the year. Shares of the company have a PE ratio of 8.22. The stock currently has a market cap of $22.80 million.
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