Signet Jewelers buying Diamonds Direct, raising outlook

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Signet Jewelers is putting a new shine on its business with the acquisition of Diamonds Direct in a $490 million all-cash deal as weddings bounce back. 

TickerSecurityLastChangeChange %
SIGSIGNET JEWELERS LTD.82.42+0.37+0.45%

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The direct-to-consumer retailer will join the company's portfolio, which includes Kay Jewelers and Zales, and 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" said Signet CEO Virginia Drosos. 

Following completion of the acquisition, Diamond Direct's current leadership team will remain intact with CEO Itay Berger reporting directly to Drosos. The transaction is expected to close in the fourth quarter of fiscal 2022, subject to customary closing conditions and regulatory approval.  

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In addition to the deal, Signet says it is raising its full-year guidance for fiscal 2022 as the company has seen strong demand from couples who put their engagement and wedding plans on hold during the COVID-19 pandemic. 

"Customers are showing positive response to our new product launches, and the reduction in government stimulus and customer shift to spending on entertainment and travel are having less impact than we previously anticipated," Signet chief financial and strategy officer Joan Hilson said in a statement. "While there remain factors beyond our control, our strengthened supply chain and vendor partnerships gave us the ability to plan earlier receipt of holiday product, and we currently do not expect any material supply chain disruptions."

Signet says it has avoided current ocean freight congestion by using air freight to transport the vast majority of its merchandise. 

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Signet now anticipates total revenue for the full year in the range of $7.04 billion to $7.19 billion and third-quarter revenue in the range of $1.42 billion to $1.45 billion, up from previous guidance of $6.80 billion to $6.95 billion and $1.26 billion to $1.31 billion, respectively. 

Meanwhile, same-store sales are expected to be in the range of 35% to 38% for the full year. 

Signet also remains on track to close over 100 stores in fiscal 2022 and open up to 100, primarily under its Banter by Piercing Pagoda banner.

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