Birks suffers in weak Western Canadian economy

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Sales fell at Birks Group in the first fiscal half due to rough economic conditions in Western Canada.

According to the Montreal-based company, sales fell 3 per cent to $129.7 million in the 26 weeks that ended September 24. Revenue from its 27 Canadian stores dropped 14 per cent to $54.9 million, while U.S. sales jumped 6 per cent to $74.9 million. Overall, the group recorded a loss of $2 million versus last year’s profit of $830,000.

Birks notes that store traffic declined along with discretionary spending. While lower sales of fine jewellery negatively affected the company’s average transaction value, it was partially offset by a 5 per cent strengthening of the Canadian dollar over a year to September 24.

In the U.S., the company expanded its offering of watch and jewellery brands, leading to a higher average transaction value.

“Despite unfavorable economic conditions and the lower than expected sales in Canada, we had a good sales performance in the United States where we outperformed many of our competitors,” says Jean-Christophe Bédos, president and chief executive officer of Birks.

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