Rentals can give those on a budget a brief taste of the good life – from luxury cars to penthouse apartments or beachfront homes. Now, add bling to that list.
Signet Jewelers, the parent of mall-based chains like Kay, Zales, and Jared, will try its hand at jewelry rentals after acquiring jewelry subscription startup Rocksbox.
A Borrowed Look
While Signet’s diamond-focused brands typically cater to men prepping for a proposal – or looking to rectify a mistake – Rocksbox peddles more affordable offerings to mostly young women shopping for their own accessories.
Much like the early Netflix DVD model — Rocksbox allows subscribers to rent three pieces of jewelry at a time for $21 per month. That monthly fee can also be applied to a jewelry purchase, helping to coax roughly half of Rocksbox renters into buying.
And after 82% of surveyed women said they would consider subscribing to a jewelry rental service, Signet jumped at the chance to scoop up a startup in the space:
- Signet CEO Virginia Drosos called jewelry rental “complementary to our traditional offerings,” noting the Rocksbox acquisition is part of a service-orientated push that already includes ear-piercing and jewelry repair at some of its 2,800 stores.
And while jewelry-for-rent hasn’t yet gained the traction of clothing rentals, Signet is preparing for the day when “He went to Jared” becomes “He went online.”
Signet outpaced estimates in the 1st quarter, pulling in $2.2 billion in revenues. And stimulus checks and impending tax refunds have kept the gemstones flowing in Q2.
But as the broader economy kicks back into gear, jewelry sales could see a slowdown. Drosos told CNBC, “We’re very cautious on the back half of the year as the vaccine rolls out and more people are more interested in traveling and entertainment again.”
Jewel In The Crown: Signet’s e-commerce sales are booming – up 70.5% in the recent quarter compared to a year earlier, while brick-and-mortar sales have dipped 4.2%. Looking ahead, the company will further “optimize” its physical footprint, largely by divorcing itself from lower-trafficked malls.