Signet Jewelers To Acquire Blue Nile For $360 Million

Signet Jewelers To Acquire Blue Nile For $360 Million

Signet Jewelers To Acquire Blue Nile For $360 Million
Signet Jewelers To Acquire Blue Nile For $360 Million
Romana Hai

Romana Hai

Romana Hai

Romana Hai

Diamond jewelry company Signet Jewelers has entered an agreement to acquire engagement rings and fine jewelry online retailer Blue Nile in an all-cash transaction for $360 million.

The acquisition will help Signet expand its bridal offerings and leadership in the jewelry category. The company already owns several other fine jewelry brands, such as Kay Jewelers, Sales and Diamonds Direct in the U.S., and Ernest Jones in the U.K., in addition to its subscription service Rocksbox.

Blue Nile’s addition to its portfolio of brands is expected to help the company grow its customer base to include younger, affluent, and more ethnically diverse shoppers. Last year, Blue Nile generated more than $500 million in revenue.

“Blue Nile is a pioneer and innovator in online engagement rings and fine jewelry, providing a unique and highly desirable shopping experience for customers,” said Signet Chief Executive Officer Virginia C. Drosos.

“Adding Blue Nile to our strong and diversified portfolio of banners will further drive our Inspiring Brilliance growth strategy – expanding customer choice, building new capabilities, and achieving meaningful operating synergies that will increase value for both our consumers and shareholders.”

The deal is expected to close in the third quarter of the fiscal year 2023.

On another note, Signet Jewelers has also noted that due to heightened pressure on consumers’ discretionary spending and increased macroeconomic headwinds, the company will be updating its guidance for the second quarter and full year of the fiscal year 2023.

“We saw sales soften in July as our customers have been increasingly impacted by rapid inflation, so we’re revising guidance to align with these trends,” said Drosos.

“That said, I’m pleased that revised guidance positions us up ~25% in revenue versus the FY20 pre-pandemic period. In addition, our transformed operating model and strong balance sheet give us dry powder, even in a down market, to invest in market share expansion as we are doing organically in our banners and with the acquisition of Blue Nile. We believe this acquisition brings additional value, capabilities, and further growth potential to our company.”

Signet Jewelers initially expected its preliminary second quarter total revenue to be approximately $1.75 billion and its non-GAAP operating income to be roughly $192 million. However, the company now expects its fiscal 2023 total revenues to hover between $7.60 billion and $7.70 billion and non-GAAP operating income to be in the $787 million to $828 million range.

During its prior fiscal 2023, guidance for total revenue ranged from $8.03 billion to $8.25 billion, with a non-GAAP operating income ranging from $921 million to $974 million.

The company revealed that its revised fiscal year 2023 outlook does not include the pending acquisition of Blue Nile or worsening macroeconomic conditions that could potentially impact consumer spending and have an associated impact on the company’s business performance.

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