Signet Halts Trade in Russian Diamonds
RAPAPORT… Signet Jewelers has told suppliers it will no longer buy metals and diamonds of Russian origin.
Purchasing precious stones, silver, gold, and platinum from sanctioned companies or people is “likely to contribute to the ongoing human-rights abuses and conflict in Ukraine,” the US retailer said last Wednesday in a letter to vendors, seen by Rapaport News.
The request to stop providing such merchandise applies to suppliers even if they operate in countries that have not imposed sanctions on Russia, the note pointed out. The jeweler has also asked vendors to certify that no diamonds or precious metals of Russian origin bought after February 24 — the beginning of Russia’s war in Ukraine — are present in any Signet products. This policy will remain in effect “until an international consensus is reached that the human-right[s] violations have ceased, and Signet notifies you of the same,” the letter continued.
A Signet spokesperson declined to clarify how the company defined “Russian origin.” The recent US sanctions on diamond imports still allow American companies to buy goods from the country so long as they underwent cutting and polishing in another country.
Earlier this month, the retailer — a contract client of Alrosa — suspended business interactions with Russian-owned entities.
“Signet’s direct purchases from Alrosa and its sourcing arrangement in Russia do not represent a significant part of its operations,” the company said Thursday in a stock-exchange filing. However, the broader impact of supply-chain disruptions “may impact the ability of Signet’s suppliers to provide Signet with responsibly sourced diamonds that were mined by other companies or in other countries,” it added.
Signet, which owns the Kay Jewelers, Zales and Jared store chains, has other sources of rough as a De Beers sightholder, CEO Virginia Drosos said last week in an earnings call. It also has seven manufacturing facilities in India subcontracted to work exclusively for the company and owns another in Botswana, she added.
Bigger market share
The situation didn’t prevent Signet from offering an upbeat outlook on the market in its full-year sales release on Thursday.
Revenue jumped 50% to $7.83 billion for the 12 months ending January 29. Net profit came to $769.9 million, compared with a loss of $15.2 million in the previous year. The result lifted Signet’s US market share to 9.3%, it claimed.
Sales in the fourth fiscal quarter, which included the holiday season, rose 29% year on year to $2.81 billion, with profit up 24% at $314.3 million. Sales for the current fiscal year could reach as much as $8.25 billion, management predicted.
The retailer did, however, forecast a potential impact of rising inflation.
“Diamond and gold costs began to increase more than usual in January 2022 but did not have a meaningful impact on Signet’s merchandise costs in the [fiscal] fourth quarter,” the company noted in its report. “Diamond and gold costs continued to rise into February and March at a rate that Signet believes was similar to consumer price indexes over the same time periods.”
Image: A Kay Jewelers store. (Shutterstock)