pound has boosted jewelry demand from tourists as travelers visit the UK seeking cheap deals, retailers have
over Britain’s exit process from the EU and the outlook for
the UK economy have dragged on the pound against
leading currencies such as the dollar and euro since the Brexit referendum last
year, according to market analysts.
transaction value in Signet Jewelers’ UK division rose 14% in the second
quarter ending July 29, while the number of purchases fell 15.5%, the US major
reported last week. Same-store sales at Signet’s UK stores fell 3.4%, mainly due to
fewer transactions in relatively low-priced fashion jewelry. However, strong
sales of luxury watches drove the strong average transaction value.
pound has been a bonus for tourists seeking luxury goods in the UK, as they have been able to use
their stronger currencies to buy prestige timepieces at cheaper prices than
they would get at home. Richemont, which owns luxury jeweler Cartier and watch
brands Jaeger-LeCoultre and Montblanc, noted “strong growth” in the UK market for the fiscal year that
ended March 31.
independent jewelry retailers in the UK said revenue was up year on year
due largely to the impact of a higher average purchase value in precious
jewelry items, even as transaction volumes fell.
drop in the pound’s value after the Brexit referendum — sterling has fallen 13%
since last year’s June vote — increased the cost for British retailers of
restocking gold and other precious metals and gemstones, which are priced in
dollars. Paul Henderson, owner of Wave Jewellery, a retailer based in northern England, found he had to pass these price
increases on to customers.
Wave Jewellery — with stores in Manchester and Kendal — saw sales rise year on
year. This occurred despite Brexit-related uncertainties and a terror attack in Manchester on May 22 that forced the store
there to close briefly, Henderson reported. Bridal sales to
millennials were buoyant in July and August, he added.
vote triggered a brief slowdown in sales, as consumers were nervous, said
Rachel Furr of Furr & Co, a jeweler located in the southern English town of Hungerford.
Furr & Co picked up by the early fall of 2016, but the pound’s
post-referendum slide pushed up prices of dollar-denominated metals and stones,
increasing the cost of buying from suppliers in the eurozone.
The UK general election this past June,
which gave no party an absolute majority, also generated uncertainty, Furr
vote did not seriously affect business at family-owned Bourne End Jewellers in
Buckinghamshire, southern England, according to store manager Jessica
Bull. However, the uncertainty may have led some customers to prioritize
repairs rather than new purchases, Bull suggested.