Signet to acquire Diamonds Direct, raises full-year guidance
International jewelry retailer Signet Jewelers Limited announced on Tuesday that it has entered into an agreement to acquire Charlotte, North Carolina-based Diamonds Direct USA Inc. for $490 million in an all-cash transaction.
Diamonds Direct is an off-mall, destination jeweler in the U.S., which Signet says has “a highly productive, efficient operating model with demonstrated growth and profitability.” According to Signet, the acquisition will be immediately accretive to the company after closing.
In particular, Signet highlighted Diamonds Direct’s customer-centric shopping experience, broad bridal range, solid value proposition and appeal to younger consumers as the retailer’s major strengths. The group said that it plans to achieve operating synergies by leveraging scale in areas including purchasing, targeted marketing and connected commerce.
“The accretive addition of Diamonds Direct to our portfolio will further drive shareholder value with its distinct bridal-focused shopping experience and add a new entry point as we build lifetime customer relationships and strive to reach our $9 billion revenue goal over time,” explained Signet CEO Virginia Drosos in a release.
“I am excited about Diamonds Direct joining the Signet family as we share a passion for company culture that prioritizes our team members, our customers and our community,” added Diamonds Direct president Itay Berger. “We are thrilled to continue to grow our business, leveraging Signet's strengths and strategic capabilities to bring even more innovation and value to our signature shopping experience.”
Following the acquisition, which is expected to close in the fourth quarter of fiscal 2022, Diamonds Direct’s current leadership will remain at the company, with Berger reporting directly to Drosos .
Diamonds Direct will join Signet’s existing portfolio of jewelry retail brands, which includes the likes of Kay Jewelers, Zales, Jared, H. Samuel and Piercing Pagoda. Signet currently operates 2,800 global stores under its various banners.
On Tuesday, Signet also revealed that, having experience continued strong business momentum, the company has revised up its financial guidance for the third quarter and full fiscal year.
The group now expects its third-quarter revenues to total between $1.42 billion and $1.45 billion, reflecting a year-over-year increase in same store sales of between 10% and 12%. This compares to a previously reported guidance of revenues in the range of $1.26 billion to $1.31 billion.
The company’s full-year revenue is now expected to be between $7.04 billion and $7.19 billion, reflecting same store sales growth in the range of 35% to 38%. Previously, Signet had predicted annual revenue in the range of $6.80 billion to $6.95 billion, while same store sales were expected to increase between 30% and 33%.
In the second quarter ended July 21, 2021, Signet reported net income of $216.0 million on revenues of $1.8 billion.
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