- Part I: Summary
- Part II: Risk Factors
- Impact of general economic conditions
- Staff
- Short term variations in consumer preferences, merchandise selection, inventory and pricing
- Reputation and marketing
- Long term changes in consumer attitudes to jewellery
- Store portfolio
- Competition
- Suppliers
- Raw materials and the supply chain
- Seasonality
- Social, ethical and environmental risks
- Internal controls and systems
- Legal actions
- Regulatory requirements
- US GAAP
- Acquisitions
- Pensions
- Equity and debt financing
- Financial market risks
- Loss of one or more key executive officers or employees
- Implementation of the Proposal
- Market price of Common Shares
- Future sales of Common Shares by existing shareholders
- Dilution to Common Shares
- Rights as a Depositary Interest Holder
- Limitations on the transferability of the Common Shares
- Changes in tax treatment
- Secondary listing
- Consequences of a secondary listing
- Proceedings against Signet Jewelers Limited
- More extensive US regulation of the Company
- Part III: The Scheme of Arrangement and Share Capital Consolidation
- Part IV: Directors, Company Secretary, Registered Office and Advisers
- Part V: Presentation of Statisical Data and Other Information
- Part VI: Information on The Group
- Part VII: Directors and Corporate Governance
- Part VIII: Selected Financial Information
- Part IX: Operating and Financial Review
- Part X: Accountant's Reports and Financial Information
- Part XI: Interim Financial Information of The Group for The 26 Week Period Ended 2 August 2008
- Part XII: Additional Information
- Part XIII: Definitions
1.7 Competition
If the Group falls behind competitors the Group's operating results or financial condition could be adversely affected. In the US, the Group has an estimated 8.8 per cent market share of the speciality jewellery sector with one major national competitor that has a 6.4 per cent market share. While another major national brand could develop, the sector is highly fragmented. As a result of the growth of Jared and the development of Kay outside of its enclosed mall base, the Group is increasingly competing with independent speciality jewellery retailers rather than national or major regional chains. Aggressive discounting by competitors including liquidating excessive inventory levels may impact the Group's sales performance in the short term. In the UK, only three other speciality jewellery chains have more than 100 stores and the Group's main competition is from independent retailers.
The channels through which consumers buy jewellery continually evolve and a major nonspeciality retailer could enter the wider jewellery market. The Group monitors the competitive environment and the development of possible new channels of distribution. In the US, for example, sales by discount retailers have increased, while those of the department stores have been in relative decline and catalogue retailers have withdrawn from the market. In the UK a number of fashion and general retailers have introduced jewellery into their ranges. The Group regularly "shops the competition" to monitor their merchandising, pricing and service standards.
In both the US and the UK, internet retailers of jewellery have gained market share.
H.Samuel added an e-commerce capability to its website in 2005/06 and both the Ernest Jones and Kay websites introduced e-commerce capabilities during 2006/07. The future success of these websites is uncertain, but their performance to date has been encouraging although their sales are not significant to the Group. While internet sales now account for 7.4 per cent (calendar 2006: 6.4 per cent) of US jewellery sales (source: US Department of Commerce), their primary impact has been on pricing visibility, particularly for certified diamonds, solitaire diamond rings and diamond stud earrings. This can have an adverse impact on gross margins.