NEW YORK (Bloomberg) — Bermudian-based Signet Jewelers Ltd’s plan to shift away from beleaguered US shopping malls can’t come soon enough.

The retailer posted a nearly 12 per cent plunge in same-store sales last quarter, a sign that sluggish mall traffic is weighing on the company’s jewellery chains. Analysts had predicted a less severe drop of 8.4 per cent, according to Consensus Metrix.

Signet, owner of the Kay, Zales and Jared brands, has been racing to decrease its reliance on mall locations.

The effort has included upgrading its website, increasing marketing and introducing products that can draw younger consumers. But relocating stores is key to the push: the company announced in March that it will close many of its mall locations and reopen some of them in places with better traffic.

Yesterday, the company said it’s on track to close about 165 to 170 stores this fiscal year. It will open 90 to 115 new stores elsewhere.

For now, the retail headwinds are blowing strong, said chief executive officer Mark Light. A slowdown in jewellery spending in particular also weighed on results, he said.

“We had a very slow start to the year,” he said.

The shares fell as much as 7 per cent to $50.72 in afternoon trading in New York after the results were posted. The stock was down 42 per cent this year through Wednesday’s close.

Signet also announced plans yesterday to begin outsourcing its in-house credit programme. The company will start by selling $1 billion of its prime accounts to Alliance Data Systems Corp.

It will retain its existing nonprime accounts on its balance sheet and continue to open new accounts, but it will outsource the servicing function to Genesis Financial Solutions for at least five years. And Signet will embark on a seven-year partnership with an Aaron’s Inc. subsidiary to provide a lease-purchase programme to Signet customers who don’t qualify for credit.

Signet, based in Akron, Ohio, began reviewing its in-house credit operations after investors raised concerns that its earnings can become too reliant on the business.