Signet Jewelers buys Diamonds Direct, increasing prospects

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Signet Jewelers is bringing new shine to its business with the acquisition of Diamonds Direct in a $ 490 million all-cash deal as marriages rebound.

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GIS SIGNET JEWELERY 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 “further increase shareholder value through its distinct bridal-centric shopping experience and add a new entry point. as we build lifelong customer relationships and strive to meet our revenue target of $ 9 billion over time, ”said Virginia Drosos, CEO of Signet.

Following the completion of the acquisition, the current management team of Diamond Direct 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 annual forecast for fiscal 2022 as the company has seen strong demand from couples who have put their engagement and wedding plans on hold during the COVID pandemic. -19.

“Customers are responding positively to our new product launches, and the reduction in government stimulus measures and the shift from customers to entertainment and travel spending is having less of an impact than expected,” said Joan Hilson, chief financial officer and Signet’s strategy in a press release. “While there remain factors beyond our control, our strengthened supply chain and supplier partnerships have enabled us to plan for earlier receipt of vacation products, and we do not currently expect any significant disruption in the supply chain. “

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

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Signet now projects full-year total revenue of $ 7.04 billion to $ 7.19 billion and third-quarter revenue of $ 1.42 billion to $ 1.45 billion , up from previous forecasts 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 between 35% and 38% for the full year.

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


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