Strengthens leadership in Bridal and
Accessible Luxury Accelerates Connected Commerce
capabilities and Digital reach
HAMILTON, Bermuda, Aug. 9, 2022
/PRNewswire/ -- Signet Jewelers Limited ("Signet" or the
"Company") (NYSE: SIG), the world's leading retailer of diamond
jewelry, today announced it has signed a definitive agreement to
acquire Blue Nile, Inc. ("Blue Nile"), a leading online retailer of
engagement rings and fine jewelry, for $360
million in an all cash transaction. Blue Nile delivered
revenue of more than $500 million in
calendar year 2021.
The strategic acquisition of Blue Nile accelerates Signet's
efforts to expand its bridal offerings and grow its Accessible
Luxury portfolio while extending its digital leadership in the
jewelry category – all to further enhance shopping experiences for
consumers and create value for shareholders. Blue Nile brings an
attractive customer demographic that is younger, more affluent, and
ethnically diverse which will broaden our customer acquisition
funnel. Upon closing, Blue Nile will be strategically positioned at
the top tier of Signet's Accessible Luxury banners along with
Jared, James Allen and Diamonds
Direct.
"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."
"By joining Signet, we will extend our premium brand and
fine jewelry offering to millions of new customers while bringing
new capabilities to our leading e-commerce business that will drive
additional growth opportunities for Blue Nile," said Sean Kell, CEO of Blue Nile. "We're equally
thrilled to join a purpose-inspired and sustainability-focused
company that shares our core values and has been recognized as a
certified Great Place to Work®."
The transaction will be funded with cash on hand and is
currently expected to close in the third quarter of Fiscal Year
2023. Regulatory filings were made in July and the applicable
waiting period has passed however the transaction is still subject
to other customary closing conditions. While synergies are likely
to start materializing as early as the fourth quarter of Fiscal
2023, the acquisition, will likely not be accretive until Q4 of
Fiscal 2024, exclusive of transaction and integration-related
charges, as well as anticipated impacts of purchase accounting
adjustments related to the transaction.
Separately, the Company is updating its guidance for the second
quarter and full year Fiscal 2023 given heightened pressure on
consumers' discretionary spending and increased macroeconomic
headwinds. Preliminary second quarter total revenue is expected to
be approximately $1.75 billion and
non-GAAP operating income is expected to be approximately
$192 million. The Company now expects
Fiscal 2023 total revenues of $7.60 –
7.70 billion and non-GAAP operating income to be in the range of
$787-828 million. This compares with
prior Fiscal 2023 guidance for total revenue of $8.03-8.25 billion and non-GAAP operating income
of $921-974 million. This revised
Fiscal Year 2023 outlook does not include 1) further material
worsening of macroeconomic factors which could impact consumer
spending patterns and have an associated impact on the Company's
business performance, or 2) the pending acquisition of Blue
Nile.
Drosos continued, "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. 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."
"While our initial guidance for FY23 anticipated the impact of
stimulus in the base period and the level of inflation that we were
seeing at that time, we have seen a further deterioration in
consumer spending, including at higher price points, in July," said
Joan Hilson, Chief Financial and
Strategy Officer. "Assuming this trend will persist in the back
half of the year, we are modestly reducing our FY23 guidance.
Importantly, our outlook continues to reflect a double digit annual
operating margin based on the strength of our transformed business
model."
Non-GAAP Measures
Forecasted non-GAAP operating income provided above excludes
potential non-recurring charges. However, given the potential
impact of non-recurring charges to operating income calculated in
accordance with accounting principles generally accepted in the US
("GAAP"), we cannot provide forecasted GAAP operating income or the
probable significance of such items without unreasonable efforts.
As such, we do not present a reconciliation of forecasted non-GAAP
operating income to corresponding GAAP operating income.
In addition to financial measures calculated and presented in
accordance with GAAP, the Company believes that non-GAAP financial
measures, when reviewed in conjunction with GAAP financial
measures, can provide more information to assist investors in
evaluating historical trends and current period performance. For
these reasons, internal management reporting and the Company's
guidance includes non-GAAP measures. Items may be excluded from
GAAP financial measures when the Company believes this provides
useful supplementary information to management and investors in
assessing the operating performance of our business. These non-GAAP
financial measures should be considered in addition to, and not
superior to or as a substitute for the GAAP financial measures
presented in the Company's consolidated financial statements and
other publicly filed reports. In addition, our non-GAAP financial
measures may not be the same as or comparable to similar non-GAAP
measures presented by other companies.
About Signet
Signet Jewelers Limited is the world's leading retailer of
diamond jewelry. As a purpose-driven and sustainability-focused
company, Signet is a participant in the United Nations Global
Compact and adheres to its principles-based approach to responsible
business. Signet is a Great Place to Work –Certified™ company and
has been named to the Bloomberg Gender-Equality Index for four
consecutive years. Signet operates approximately 2,800 stores
primarily under the name brands of Kay Jewelers, Zales, Jared,
Banter by Piercing Pagoda, Diamonds Direct, JamesAllen.com,
Peoples, H. Samuel, Ernest Jones and
the jewelry subscription service, Rocksbox. Further information on
Signet is available at www.signetjewelers.com. See also
www.kay.com, www.zales.com, www.jared.com, www.banter.com,
www.diamondsdirect.com, www.jamesallen.com,
www.peoplesjewellers.com, www.hsamuel.co.uk, www.ernestjones.co.uk
and www.rocksbox.com.
About Blue Nile
Blue Nile, Inc. is a leading online retailer of high-quality,
conflict-free, GIA graded diamonds and fine jewelry. The company
offers a highly desirable experience for purchasing engagement
rings, wedding rings, and fine jewelry by providing expert
guidance, in-depth educational materials, and unique online tools
that place consumers in control of the jewelry shopping process.
Blue Nile has some of the highest quality standards in the industry
and offers thousands of independently graded diamonds and fine
jewelry. Blue Nile can be found online at www.bluenile.com and at
21 physical showrooms located throughout the United States.
Safe Harbor Statement
This release contains statements which are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements based upon management's
beliefs and expectations as well as on assumptions made by and data
currently available to management, appear in a number of places
throughout this document and include statements regarding, among
other things, results of operations, financial condition,
liquidity, prospects, growth, strategies and the industry in which
Signet operates. The use of the words "expects," "intends,"
"anticipates," "estimates," "predicts," "believes," "should,"
"potential," "may," "preliminary," "forecast," "objective," "plan,"
or "target," and other similar expressions are intended to identify
forward-looking statements. These forward-looking statements are
not guarantees of future performance and are subject to a number of
risks and uncertainties which could cause the actual results to not
be realized, including, but not limited to: difficulty or delay in
executing or integrating an acquisition, including Blue Nile, or
executing other major business or strategic initiatives, the
negative impacts that the COVID-19 pandemic has had, and could have
in the future, on Signet's business, financial condition,
profitability and cash flows; the effect of steps we take in
response to the pandemic; the severity, duration and potential
resurgence of the pandemic (including through variants), including
whether it is necessary to temporarily reclose our stores,
distribution centers and corporate facilities or for our suppliers
and vendors to temporarily reclose their facilities; the pace of
recovery when the pandemic subsides and the heightened impact it
has on many of the risks described herein, including without
limitation risks relating to disruptions in our supply chain, our
ability to attract and retain labor especially if COVID-19 vaccine
mandates are implemented, consumer behaviors such as willingness to
congregate in shopping centers and shifts in spending away from the
jewelry category toward more experiential purchases, the impacts of
the expiration of government stimulus on overall consumer spending,
our level of indebtedness and covenant compliance, availability of
adequate capital, our ability to execute our business plans, our
lease obligations and relationships with our landlords, and asset
impairments; general economic or market conditions, including
impacts of inflation or other pricing environment factors on the
Company's commodity costs (including diamonds) or other operating
costs; a prolonged slowdown in the growth of the jewelry market or
the overall economy; financial market risks; a decline in consumer
discretionary spending or deterioration in consumer financial
position, including the impacts of inflation and rising prices on
necessities such as gas and groceries; our ability to optimize
Signet's transformation strategies; changes to regulations relating
to customer credit; disruption in the availability of credit for
customers and customer inability to meet credit payment
obligations; our ability to achieve the benefits related to the
outsourcing of the credit portfolio, including due to technology
disruptions, future financial results and operating results and/or
disruptions arising from changes to or termination of the relevant
outsourcing agreements; deterioration in the performance of
individual businesses or of the Company's market value relative to
its book value, resulting in impairments of long-lived assets or
intangible assets or other adverse financial consequences; the
volatility of our stock price; the impact of financial covenants,
credit ratings or interest volatility on our ability to borrow; our
ability to maintain adequate levels of liquidity for our cash
needs, including debt obligations, payment of dividends, planned
share repurchases (including execution of accelerated share
repurchases) and capital expenditures as well as the ability of our
customers, suppliers and lenders to access sources of liquidity to
provide for their own cash needs; changes in our credit rating;
potential regulatory changes; future legislative and regulatory
requirements in the US and globally relating to climate change,
including any new climate related disclosure or compliance
requirements, such as those recently proposed by the SEC; global
economic conditions or other developments related to the
United Kingdom's exit from the
European Union; exchange rate fluctuations; the cost, availability
of and demand for diamonds, gold and other precious metals,
including any impact on the global market supply of diamonds due to
the ongoing Russia-Ukraine conflict or related sanctions;
stakeholder reactions to disclosure regarding the source and use of
certain minerals; seasonality of Signet's business; the
merchandising, pricing and inventory policies followed by Signet
and failure to manage inventory levels; Signet's relationships with
suppliers including the ability to continue to utilize extended
payment terms and the ability to obtain merchandise that customers
wish to purchase; the failure to adequately address the impact of
existing tariffs and/or the imposition of additional duties,
tariffs, taxes and other charges or other barriers to trade or
impacts from trade relations; the level of competition and
promotional activity in the jewelry sector; our ability to optimize
Signet's multi-year strategy to gain market share, expand and
improve existing services, innovate and achieve sustainable,
long-term growth; the maintenance and continued innovation of
Signet's OmniChannel retailing and ability to increase digital
sales, as well as management of its digital marketing costs;
changes in consumer attitudes regarding jewelry and failure to
anticipate and keep pace with changing fashion trends; changes in
the supply and consumer acceptance of and demand for gem quality
lab created diamonds and adequate identification of the use of
substitute products in our jewelry; ability to execute successful
marketing programs and manage social media; the ability to optimize
Signet's real estate footprint; the ability to satisfy the
accounting requirements for "hedge accounting," or the default or
insolvency of a counterparty to a hedging contract; the performance
of and ability to recruit, train, motivate and retain qualified
team members - particularly in regions experiencing low
unemployment rates; management of social, ethical and environmental
risks; the reputation of Signet and its banners; inadequacy in and
disruptions to internal controls and systems, including related to
the migration to new information technology systems which impact
financial reporting; security breaches and other disruptions to
Signet's information technology infrastructure and databases; an
adverse development in legal or regulatory proceedings or tax
matters, including any new claims or litigation brought by
employees, suppliers, consumers or shareholders, regulatory
initiatives or investigations, and ongoing compliance with
regulations and any consent orders or other legal or regulatory
decisions; failure to comply with labor regulations; collective
bargaining activity; changes in corporate taxation rates, laws,
rules or practices in the US and jurisdictions in which Signet's
subsidiaries are incorporated, including developments related to
the tax treatment of companies engaged in Internet commerce or
deductions associated with payments to foreign related parties that
are subject to a low effective tax rate; risks related to
international laws and Signet being a Bermuda corporation; risks relating to the
outcome of pending litigation; our ability to protect our
intellectual property or physical assets; changes in assumptions
used in making accounting estimates relating to items such as
extended service plans and pensions; or the impact of
weather-related incidents, natural disasters, organized crime or
theft, strikes, protests, riots or terrorism, acts of war
(including the ongoing Russian-Ukraine conflict), or another public
health crisis or disease outbreak, epidemic or pandemic on
Signet's business.
For a discussion of these and other risks and uncertainties
which could cause actual results to differ materially from those
expressed in any forward looking statement, see the "Risk Factors"
and "Forward-Looking Statements" sections of Signet's Fiscal 2022
Annual Report on Form 10-K filed with the SEC on March 17,
2022 and quarterly reports on Form 10-Q and the "Safe Harbor
Statements" in current reports on Form 8-K filed with the SEC.
Signet undertakes no obligation to update or revise any
forward-looking statements to reflect subsequent events or
circumstances, except as required by law.
Investors:
Vinnie Sinisi
SVP Investor Relations
+1 330 665 6530
vincent.sinisi@signetjewelers.com
Media:
Lindsay Hymson
Vice President Financial Communications & Media Relations
+1 516 524 1757
Lindsay.hymson@signetjewelers.com
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SOURCE Signet Jewelers Ltd.