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US Real Estate

 Fiscal 2011 PlannedFiscal 2010Fiscal 2009Fiscal 2008
Total opened during the year81677108
Kay68(1)57(1)68
Jared271719
Regional brands-1321
Total closed during the year(50)(56)(75)(17)
Kay(14)(11)(25)(6)
Jared----
Regional brands(36)(45)(1)1,4011,399
Total open at the end of the year1,3191,3611,3081,221
Kay915923926894
Jared180178171154
Regional brands224260304351
Average sales per store in thousands(2) $1,814$1,788$1,996
Kay $1,582$1,536$1,710
Jared $4,046$4,491$5,341
Regional brands $1,163$1,160$1,344
(Decrease)/increase in net new store space(2)%(1)%4%10%
Percentage increase/(decrease) in same store sales 0.2%(9.7)%(1.7)%

(1) Includes two regional stores rebranded as Kay in fiscal 2010, and 14 in fiscal 2009.
(2) Based only upon stores operated for the full fiscal year.

Kay Jewelers store frontGiven the challenging environment, and management’s strict investment criteria, action was taken in early fiscal 2009 to sharply slow the rate of store space growth and the level of store refurbishments. This was achieved by reducing the number of stores opened and increasing store closures as leases expired. Net store space in fiscal 2010 decreased by 1% (fiscal 2009: increase 4%), see table on page 82 of Form 10-K for details. Capital expenditure in new and existing stores was $18.2 million (fiscal 2009: $56.3 million). Working capital investment, that is inventory and receivables, associated with new stores was $28.2 million (fiscal 2009: $66.5 million). In fiscal 2011, store capital expenditure is planned to amount to about $5 million on new space and about $35 million on existing stores, with about $11 million of working capital investment associated with new store openings.

 

Recent and planned investment in the store portfolio is set out below:

 Fiscal 2011 Planned
$m
Fiscal 2010
$m
Fiscal 2009
$m
Fiscal 2008
$m
New store fixed capital investment510.139.060.1
Other store fixed capital investment358.117.328.0
Total store fixed capital investment4018.256.388.1
Working capital investment in new stores1128.266.5118.8

As a result of the growth of Jared and the development of Kay outside of its enclosed mall base, the US division is increasingly competing with independent specialty jewelry retailers that are able to adjust their competitive stance, for example on pricing, to local market conditions. This can put individual stores at a competitive disadvantage as the US division has a national pricing strategy.

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