A pedestrian walks past a Zales store in New York.
Scott Eells | Bloomberg | beautiful pictures
Signet Jewelers said on Tuesday that it would acquire online jewelry retailer Blue Nile for $360 million in an all-cash deal, aimed at attracting younger consumers and growing its business. his bride.
Additionally, Signet cut its financial forecast for the second quarter and full year of fiscal 2023, due to “growing pressure on consumer discretionary spending” and other macroeconomic difficulties.
CEO Virginia Drosos said the company started to see softer sales in July as shoppers began to dominate their spending amid 40-year high inflation.
The parent company of Zales, Jared and Kay Jewelers said it posted second-quarter revenue of about $1.75 billion and non-GAAP operating income totaling about $192 million.
The company now expects fiscal 2023 revenue to be between $7.60 billion and $7.70 billion, down from its previous level of $8.03 billion to $8.25 billion.
It fixed annual non-GAAP operating income between $787 million and $828 million, down from the previous guidance of $921 million to $974 million.
Signet said the revised figures do not account for further worsening of macroeconomic factors that could affect consumer spending, as well as pending Blue Nile acquisitions.
Signet said the deal, which will be financed by cash, is expected to close in the third quarter. However, it said the deal likely won’t come to fruition until the fourth quarter. of the financial year 2024.
Even in a bear market, Drosos said, the company’s strong balance sheet and “dry powder” allowed it to finance the Blue Nile acquisition to increase market share.
Earlier this year, Blue Nile and its special-purpose acquirer Mudrick Capital Acquisition Corp. said it had agreed to incorporate in an agreement that would allow the jewelry brand to go public through SPAC. The merger valued the combined business at the time at $873 million.
Blue Nile and Mudrick did not immediately respond to CNBC’s request for comment on why the deal fell through.
Signet stock rose about 2% in pre-market trading. Shares are down about 22% so far, as of Monday’s market close.
