Engagement ring sales have plummeted, according to America’s largest jeweler

New York (CNN) It ​​seems to be a tumultuous time for retailers serving couples in love.

Hot on the heels of David’s Bridal, the biggest seller of wedding dresses, which filed for bankruptcy last week, another big seller of symbols of lasting love, like rings, announced its business has yet to recover from Covid-19.

According to Signet Jewelers, the largest jewelry company in the United States, the pandemic has impacted sales of engagement rings as lockdowns have stalled or never blossomed.

Signet Jewelers (SIG), with brands including Zales, Jared, Kay Jewelers and Diamonds Direct under its umbrella, said many early relationships in particular faded as lockdowns began in the winter and spring of 2020, followed by a dramatic drop in dating.

This created an “engagement gap,” it said.

“We’re still seeing it today,” said Jamie Singleton, Signet Jewelers’ president and chief consumer officer, during the company’s investor day last week.

Citing company research, Singleton said the average couples get engaged about 3.25 years after they start dating.

“What has happened in recent years is what we expected and planned,” she said. “Engagement jewelry sales were lackluster in fiscal 2023 and we expect to remain so for the remainder of fiscal 2024.”

The category needs to grow about 25% by calendar year 2026 just to return to previous levels of engagement, she said.

But there is some evidence of a turnaround, Singleton said. And it’s vital to Signet’s business, given that 50% of the company’s merchandise sales come from the bridal segment.

“As people come out of lockdown, we’ve been monitoring the return of dating… Dating is actually 8% higher than pre-Covid.”

READ :  Be the breadwinner: 6 steps to secure your financial future

That doesn’t mean that engagement will suddenly recover overnight, but that the potential for engagement growth to come is promising. “We are confident for the coming turning point,” she said.

Virginia C. Drosos, CEO of Signet Jewelers, told investors that the company is committed to hitting a $9 billion to $10 billion annual revenue target over the next three to five years “when engagements return to normal levels.” to return”. Signet, she said, currently has a 30% share of the bridal jewelry market.

“We expected this coming tailwind,” she said. “We expect this to bring significant upside to our business in the coming years.

Meanwhile, the pandemic has also impacted bridal dress sales as social gatherings of all kinds ground to a halt and couples postponed their weddings.

As appointments rebooked in the wake of the pandemic, brides-to-be have had to deal with inflation and economic uncertainty affecting spending.

David’s Bridal said these macro trends, along with competition from cheaper online and second-hand retailers, hurt its business.

“More and more brides are choosing less traditional wedding attire, including second-hand wedding dresses. These changing consumer preferences have significantly exacerbated the company’s financial crisis,” David’s Bridal said in a bankruptcy filing.