(Bloomberg) — Piercing Pagoda, the jewelry chain with kiosks in hundreds of mall hallways across the U.S., sees a lot more stores with four walls and a door in its future.
As part of a broad repositioning, the Signet Jewelers Ltd. unit will begin opening more enclosed locations in malls, outfitted with piercing lounges. The chain’s name is changing to Banter by Piercing Pagoda, and it will roll out facial and nose piercings to more of its shops. It’s rolling out a new website that lets people book appointments and will eventually have the capability to do virtual try-ons.
Executives are bidding to win over new customers who are willing to linger longer while shopping. Although it accounts for just 6% of Signet’s overall sales, more growth for the piercing chain could help its parent reach a companywide target of $9 billion in annual revenue in the coming years.
Signet will open as many as 100 new Banter locations in malls this year, with roughly half of those being enclosed stores, according to Kecia Caffie, president of Banter by Piercing Pagoda. Going beyond the kiosk model gives consumers who want to get pierced more privacy than a mall hallway does, she said.
“Ultimately we want Banter by Piercing Pagoda to be a place where they can come and have an experience,” Caffie said in an interview. “We are able to retain a name that our current customers know and trust while also evolving the brand with Banter to attract new customers.”
Broader Strategy
The moves are part of Signet’s broader turnaround strategy under Chief Executive Officer Gina Drosos. The company, which also owns mall stalwarts Kay Jewelers, Jared and Zales, is ramping up its e-commerce capabilities and repositioning where its stores are located. Last year Signet closed about 400 locations, and it expects to close 100 more in 2021. Its largest chain, Kay, is headed to more off-mall spots.
Banter, which caters to Gen Z and millennial customers with less-expensive jewelry like charms and earrings, will stay in regional malls. About 135 of its more than 500 current locations are on track to bring in $1 million in sales each, and the brand recorded its sixth consecutive year of positive same-store sales, a key retail metric.
It’s contending, however, with the broader trend of malls losing relevance. When the company opened its first mall kiosk a half-century ago, malls were central to many Americans’ shopping experience. In the past year and a half, with the pandemic, consumers have grown even more comfortable shopping online for a range of items. This poses a hurdle for Banter as it diversifies its store format within these shopping centers, according to David Silverman, a retail analyst at Fitch Ratings Inc.
Secular Trend
“We’ve essentially seen a secular trend of people not spending a lot of time in malls,” Silverman said. “That will continue to be a challenge for a company like Piercing Pagoda that relies on a significant amount of walk-by traffic.”
Although piercing is a physical transaction that can’t be done online, improving the brand’s web presence remains critical to its growth. In April, Signet said it expects a third of its $9 billion revenue target to come from e-commerce. Banter currently lags behind other Signet brands in e-commerce penetration, Caffie said.
The updated website seeks to attract young customers by being more mobile-friendly and allowing shoppers to chat with virtual stylists.
“We know that today people shop lots of different ways and they interact with the banners in various ways,” Caffie said. “So having a very strong e-commerce presence is important.”
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