Engagement ring sales are down sharply, according to America’s biggest jeweler
(CNN) — It seems to be a turbulent time for retailers who cater to couples in love.
On the heels of David’s Bridal, the largest seller of wedding dresses declaring bankruptcy last week, another big seller of symbols of enduring love, like rings, disclosed that their business has not yet recovered from Covid-19.
According to Signet Jewelers, the largest jewelry company in the United States, the pandemic dented sales of engagement rings as relationships faltered or never even blossomed in the first place due to the lockdowns.
Signet Jewelers, with brands including Zales, Jared, Kay Jewelers and Diamonds Direct under its corporate umbrella, said a lot of early relationships, in particular, faded as lockdowns began in the winter and spring of 2020, only to be followed by a dramatic decline in dating.
This created, it said, an “engagement gap.”
“We’re still seeing it today,” Jamie Singleton, Signet Jewelers’ president and chief consumer officer, said during the company’s investor day last week.
Citing company research, Singleton said couples, on average, get engaged about 3.25 years after they begin dating.
“So what’s happened over the past couple of years is what we anticipated and what we planned for,” she said. “Engagement jewelry sales were lackluster in fiscal 2023, and we expect them to remain so for the balance of fiscal 2024.”
The category will need to grow approximately 25% by calendar year 2026 just to return to prior engagement levels, she said.
But there’s some evidence of a turnaround, said Singleton. And it’s vital for Signet’s business because 50% of the company’s merchandise sales come from the bridal segment.
“As people begin getting back out after the lockdowns, we monitored the return of dating… Dating, in fact, is up 8% to pre-Covid.”
It doesn’t mean engagements will suddenly rebound overnight, but that the potential is promising for a coming pickup in engagements. “We’re confident in the turn that’s coming,” she said.
Signet Jewelers CEO Virginia C. Drosos told investors that the company is striving to reach a $9 billion to $10 billion revenue target annually in the next three to five years “as engagements return to normal levels.” Signet, she said, currently has 30% share of the bridal jewelry market.
“We’ve been anticipating this coming tailwind,” she said. “We expect this to drive significant upside in our business over the coming years.
Meanwhile, the pandemic also walloped sales of wedding dresses as social gatherings of all kinds came to a standstill, and couples postponed their weddings.
As dates were re-booked coming out of the pandemic, brides-to-be have had to contend with inflation and economic uncertainty bearing down on expenses.
David’s Bridal said these macro trends, as well as competition from more affordable online and secondhand retailers, hurt its business.
“An increasing number of brides are opting for less traditional wedding attire, including thrift wedding dresses. These shifting consumer preferences have significantly exacerbated the company’s financial crunch,” David’s Bridal said in a bankruptcy filing.