Ernest Jones (inc. Leslie Davis)

Click to view our virtual store tour 

View the Ernest Jones retail website

Click here to see Ernest Jones locations 

Introduction
Ernest Jones accounted for 11% of Group sales in fiscal 2009 (fiscal 2008: 12%), and is the second largest specialty retail jewelry brand in the UK with an approximate 4% share of the total jewelry market. It serves the upper middle market and its customers typically have an annual household income of between £30,000 and £50,000. It sells a broad range of diamond and gold jewelry as well as prestige watches such as Breitling, Cartier, Longines, Omega, Rado, Raymond Weil, Rolex and Tag Heuer. It also sells contemporary fashion watches such as Burberry, DKNY, Emporio Armani, Gucci, Hugo Boss and a range of traditional watches including Accurist, Rotary, Seiko and Tissot.

Ernest Jones had 206 stores at January 31, 2009 (February 2, 2008: 204) and is represented in nearly all large shopping centers. Since September 2006, Ernest Jones has had an e-commerce capability, http://www.ernestjones.co.uk/, which is the second most visited UK specialty jewelry website (source: Hitwise).

Where local market size and merchandise considerations allow, a two-site strategy is followed using the Leslie Davis trading name. While having a similar customer profile to Ernest Jones, Leslie Davis is differentiated by a greater emphasis on fashion brands and the store design. There were 15 Leslie Davis stores at January 31, 2009 (February 2, 2008: 16).

Ernest Jones sales were £208.3 million in fiscal 2009 (fiscal 2008: £219.4 million), with e-commerce showing good growth. Sales per store in fiscal 2009 were £1.047 million (fiscal 2008: £1.105 million) and the average selling price was £202 (fiscal 2008: £180).

No.1 UK upper middle market jeweller No.1 UK upper middle market jeweller   Fiscal 2009 Fiscal 2008 Fiscal 2007(1) Sales £208.3 £219.4 £217.6 Stores 206 204 206 Average sales per store* £1,011 £1,075 £1,056
Customers typical household income	£30k-50k
Average selling price	£202
Share of UK jewelery sector	c.4%
Average store selling space	870 sq ft
Highest sales density per square foot of any Signet brand

* Includes only stores operated for the full financial period.

Customer service
As over two thirds of Ernest Jones sales mix consists of diamonds and watches, store staff provide a high level of customer service and have detailed product knowledge. An increasing proportion of staff have undertaken training provided by the division in conjunction with the International Gemological Institute (“IGI”) or the British Horological Institute (“BHI”). During fiscal 2009 an enhanced store design, which had been successfully tested in fiscal 2008, was rolled out to 36 stores (including new stores). The quality of staff training was further improved, with over 47% of Ernest Jones staff having gained an externally recognized jewelry industry qualification.

Merchandising
During fiscal 2009 watch participation in the merchandise mix increased to 35% and Ernest Jones continues to develop its relationships with the leading watch distributors. Diamond sales declined to 33%. The average retail price of merchandise sold in Ernest Jones in fiscal 2009 was £202 (fiscal 2008: £180). In fiscal 2009 within the diamond category the average selling price increased to £4xx (fiscal 2008: £440).

Ernest Jones merchandise mix (excluding repairs, warranty and other miscellaneous sales)

Marketing
Ernest Jones utilizes catalogs, customer relationship marketing and its website as its primary forms of marketing. Catalogs are distributed by mail and as inserts in newspapers and magazines. They are also available in all stores. For the last five years television advertising had been tested for Ernest Jones but during fiscal 2009 it was decided to discontinue this test and increase the emphasis on customer relationship marketing and national newspaper advertising. The Ernest Jones website, which has been transactional since September 2006, continues to perform in an encouraging way, but its sales remain relatively small within a divisional context.

Store Design
Ahead of a major refurbishment program, an enhanced more contemporary customer oriented store design was developed and tested in late fiscal 2008. The design increased differentiation by giving greater prominence to the Ernest Jones brand and the watch agencies, as well as providing an improved environment for selling diamond jewelry. This design began to be rolled out in fiscal 2009.

Real estate
Ernest Jones’ normal refurbishment cycle is ten years and the majority of its stores are due for refit between fiscal 2009 and fiscal 2012. During fiscal 2009, 31 refits and resites were completed, including two Leslie Davis stores (fiscal 2008: 11 refits and resites were completed, including three Leslie Davis stores). At January 31, 2009 82 stores, accounting for 47% of sales, traded in the more customer oriented format (February 2, 2008: 48). 15 refits and resites are planned for fiscal 2010.

The number of Ernest Jones stores has been broadly stable over the last five years. While further locations will be added depending on the availability of both suitable sites and prestige watch agencies, store numbers are expected to be little changed.

(1) 53 week year
(2) Including Leslie Davis stores
(3) Including only stores operated for the full financial year