Signet plans to buy Blue Nile, the leading e-tailer in the U.S. jewelry space, for $360 million in an all-cash transaction.
This is Signet’s second major e-commerce transaction; it bought James Allen for $328 million in 2017.
Blue Nile’s 2021 revenues were $566 million, up 21% from the prior year. The company did not, however, post a profit, and Signet does not expect the deal to be accretive until the fourth quarter of fiscal year 2024.
Blue Nile had filed to go public in June through a special purpose acquisition company (SPAC). Given that the market has soured on SPACs, some thought Blue Nile’s IPO faced challenges.
This deal values it at far less than the $873 million Blue Nile expected from its IPO, as well as the $500 million Bain Capital paid in 2016.
“Blue Nile brings an attractive customer demographic that is younger, more affluent, and ethnically diverse, which will broaden our customer acquisition funnel,” said Signet in a statement. “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.”
Signet bought Diamonds Direct in 2021.
While the Federal Trade Commission has recently blocked several mergers on antitrust grounds, Signet’s statement noted that “regulatory filings were made in July and the applicable waiting period has passed however the transaction is still subject to other customary closing conditions.”
Signet also adjusted its guidance downward. It now expects total revenues for fiscal 2023 to come in at $7.6 billion–$7.7 billion—compared with its prior forecast of $8.03 billion–$8.25 billion.
“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 Signet CEO Gina Drosos in a statement.
Added chief financial officer Joan Hilson: “We have seen a further deterioration in consumer spending, including at higher price points, in July.”
Top: A Blue Nile showroom (photo courtesy of Blue Nile)
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