Signet Jewelers will acquire ecommerce jewelry retailer Blue Nile for $360 million in an all-cash transaction. The deal will help accelerate Signet’s efforts to expand its bridal offerings and grow its Accessible Luxury portfolio while extending its digital leadership in the jewelry category.
Blue Nile brings a younger, more affluent and ethnically diverse customer demographic to Signet that will help broaden the company’s customer acquisition funnel. 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 Virginia C. Drosos, CEO of Signet in a statement. “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 transaction will be funded with cash on hand and is currently expected to close during the retailer’s Q3 2023, which will occur in late 2022. The transaction is still subject to other customary closing conditions.
Signet also revised its fiscal 2023 outlook downwards, forecasting total revenues of $7.6 to $7.7 billion rather than $8 to $8.25 billion. The retailer associated the change to “further material worsening of macroeconomic factors which could impact consumer spending patterns,” including inflation, and the acquisition of Blue Nile, which isn’t expected to impact growth until the retailer’s Q4 2024.
“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 approximately 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.”