Click to view our virtual store tour View the Kay retail website Click here to see the locations of Kay stores Kay operated 923 stores in 50 states at January 30, 2010 (January 31, 2009: 926 stores). Since fiscal 2005 Kay has been the largest specialty retail jewelry brand in the US, based on sales, and has subsequently increased its leadership position. Kay targets households with an income of between $35,000 and $100,000. Such households account for between 45% and 50% of US jewelry expenditure. Kay sales were $1,508.2 million during fiscal 2010 (fiscal 2009: $1,439.1 million). The increase in sales was due to a 14% rise in the number of transactions partly offset by a decrease in the average retail price of merchandise sold to $307 (fiscal 2009: $331), primarily reflecting changes in merchandise mix. Same store sales increased by 4.4% during the year, with the fourth quarter up 7.7%. During fiscal 2010, the number of Kay stores fell by three to 923. The Kay website, www.kay.com, was enhanced further and e-commerce sales increased significantly, but remain small in the context of the brand. Real Estate
Kay stores typically occupy about 1,500 square feet and have around 1,250 square feet of selling space. They have historically been located in enclosed regional malls. Since 2002, new formats have been developed for locations outside of traditional malls, because management believes these alternative locations present an opportunity to reach new customers who are aware of the brand but have no convenient access to a store, or for customers who prefer not to shop in an enclosed mall. Such stores further leverage the strong Kay brand, marketing support and the central overhead. In addition, nearly all current retail construction projects undertaken in recent years by developers are in formats other than enclosed regional malls. | No.1 specialty retail jeweler in US based on sales
| | | Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | | Sales (million) | $1,508.2 | $1,439.1 | $1,489.6 | | Stores at year end | 923 | 926 | 894 | | Average sales per store* | $1.582m | $1.536m | $1.710m |  | | Customers typical household income | $35k-100k | | Average selling price | $307 | | Share of US jewelery sector | 2.6% | Average store selling space
| 1,250 sq ft |
* includes only stores operated for the full financial period. |
Enclosed Regional Malls
The average Kay store in an enclosed regional mall contains approximately 1,250 square feet of selling space and 1,600 square feet of total space. The design and appearance of stores is standardized. The typical capital and working capital investment in the first year of trading is about $1.0 million. To maximize customer footfall, these stores are normally only opened in center court locations, corner locations by the main entrance or in corner locations by the food court; around 60% of the stores have center court sites. In fiscal 2010, there was a net closure of one mall store, bringing the total to 794. Off-mall Locations
Off mall locations include ‘power’ centers and ‘lifestyle’ centers. A power center is a suburban open air shopping complex where the retail mix is predominantly ‘category killer’ superstores with some smaller specialty units. Lifestyle centers are suburban open air shopping centers where the retail mix is biased toward fashion stores and is also likely to have a large number of restaurants and other leisure facilities such as a movie theatre. At January 30, 2010 there were 111 such stores trading (January 31, 2009: 113). These stores are expected to have a lower initial capital expenditure, lower rents and lower sales per store at maturity than that of the Kay chain average, and are anticipated to satisfy Signet's normal return on investment hurdle. Outlet Locations
A test of Kay in outlet malls began in fiscal 2007 when four stores were opened. These stores provide penetration into the value conscious sector of the market and are located in two types of centers: ‘Factory outlets’, in which 50% or more tenants are manufacturers’ outlets; and ‘Mixed use’ centers, typically with one million square feet of manufacturers’ outlet units, traditional mall stores and large space retailers. The core merchandise is the same as in all other Kay stores, as is the pricing structure, but the range in such outlet locations is supplemented by clearance merchandise rather than fashion product. At January 30, 2010 there were 18 (January 31, 2009: 18) Kay stores in outlet locations. The capital expenditure to open an outlet store is around 15% less than that of a traditional mall store. |
