* Signet profit up; misses estimates by 2 cents
* Harry Winston posts narrower-than-expected loss
* Cost cuts offset weak jewelry sales at Signet
* Signet sales fall 7.3 pct; Harry Winston rev down 30 pct
* Signet, Harry Winston shares both up over 2 pct (Adds background, details from Signet CEO interview)
By Dhanya Skariachan
NEW YORK, June 4 (Reuters) - Top jewelry retailer Signet Jewelers Ltd (SIG.N) posted a higher quarterly profit on Thursday on cost cuts, while Canada’s Harry Winston Diamond Corp HW.TOHWD.N posted a smaller-than-expected loss.
Signet, which runs Kay Jewelers and Jared The Galleria of Jewelry stores in the United States, and Ernest Jones and H Samuel in Britain, also gained market share in the quarter as many of its rivals shut stores or went bankrupt.
The world’s largest specialty retailer’s marketing efforts and more exclusive merchandise are bolstering its market share, Signet group Chief Executive Terry Burman told Reuters in an interview. [ID:nN04222355]
”We have got the size to have more marketing power than any of our competitors,“ Burman said. ”Most of our rivals are having to make more draconian cuts out of necessity. He added that Signet’s strong financials allows it to continue our advertising.
In addition to its marketing efforts and increased promotions, the jewelry retailer has also put a tight lid on expenses to fight the slump.
The company plans to reduce retail space by 2 percent and close 75 mall-based stores this year, Burman said, adding it was on track to save up to $100 million in costs in 2009. [ID:nWNAB6714]
It had earlier announced plans to cut costs, delay new store openings and reduce its net debt by around $200 million this fiscal year to shore up its business.
Signet’s net profit rose to $26.3 million, or 31 cents a share, for the first quarter that ended May 2, from $25.7 million, or 30 cents a share, a year earlier. Its profit, however, missed Wall Street expectations by 2 cents.
Signet’s selling, general and administrative costs fell 11 percent in the quarter.
Harry Winston reported a first-quarter net loss of $45.1 million, or 68 cents a share, compared with net earnings of $21.3 million, or 35 cents a share, a year earlier.
Excluding items, the Canadian company -- which owns the Harry Winston diamond retail chain as well as just over 30 percent of the Diavik diamond mine in Canada’s Arctic -- posted a loss of 10 cents a share. This compares with analysts’ forecast of a loss of 33 cents a share. [ID:nN04186316]
Sales at Signet dropped fell 7.3 percent to $762.6 million, while those at Harry Winston fell 30 percent to $109.6 million.
The results come days after high-end jeweler Tiffany & Co (TIF.N) posted a 62 percent drop in quarterly profit [ID:nN29353279] and rival Zale Corp’s ZLC.N loss widened as sales plunged 20.5 percent. [ID:nN27493745]
Jewelry sales have been hit in the recession as customers have been opening their wallets only for essentials. The dismal retail climate has even forced a few jewelers, such as Fortunoff, to seek bankruptcy protection or liquidate.
Signet’s group same-store sales fell 2.9 percent for the quarter.
Signet shares rose 2.27 percent to $19.83 on the New York Stock Exchange, after touching a high of $20.14 earlier on Thursday. Harry Winston rose 2.44 percent to $6.73 on the NYSE. (Reporting by Dhanya Skariachan; Editing by Maureen Bavdek, Derek Caney, Richard Chang)