Signet UK arm to be hit by the weakness of sterling

Signet, which runs H Samuel, Ernest Jones and Leslie Davis, said the UK business made an operating loss of $3.6m (£2.2m) for the quarter. It added that fourth quarter gross merchandising margins are expected to fall due to the weakness of the pound.

Diamonds performed particularly well at H Samuel and Ernest Jones. The average unit selling price at H Samuel grew 9.6%, reflecting both price rises and a change to product mix. At Ernest Jones the same effects led to unit selling prices increasing by 12%.

Total like-for-like store sales across the US group fell 1.9% in its third quarter.

Signet chief executive Terry Burman said: “We have made further good progress towards achieving our strategic and financial objectives for fiscal 2010. Results for the quarter were significantly better than last year reflecting expansion of profitable market share, as well as the continued tight control of costs and gross merchandise margin.

“In addition, we now expect to achieve a reduction in net debt of between $300m (£181m) and $350m (£211m) this year compared to our original target of $175m (£105.5m) to $225 m (£135.7m). We have further reinforced our operational advantages in customer service, merchandising and marketing, which means we are well prepared for the challenges of an uncertain marketplace.”