Signet Buys Blue Nile for $360M

A Blue Nile showroom in Oregon

Signet Jewelers has signed a deal to acquire online retailer Blue Nile for $360 million in cash.

The purchase will boost Signet’s bridal, “accessible luxury” and digital businesses, while expanding the group’s consumer base, the US retail chain said Tuesday. The company expects to complete the transaction in the third fiscal quarter, which runs until late October. Either side can pull out if the deal hasn’t closed by November 3, 2022.

“Blue Nile brings an attractive customer demographic that is younger, more affluent, and ethnically diverse, which will broaden our customer-acquisition funnel,” Signet added.

The announcement comes around two months after Blue Nile revealed plans for a stock-market flotation via a merger with Mudrick Capital Acquisition Corporation II, a special-purpose acquisition company (SPAC). The proposed deal valued Blue Nile at $873 million. Mudrick was not immediately available for comment on how that transaction progressed. The current owners are Bain Capital Private Equity and Bow Street, which acquired the e-commerce jeweler for around $500 million in 2017.

Blue Nile’s sales exceeded $500 million in 2021, according to Signet, which has stated its intention to reach total annual revenues of $9 billion in the coming years. Last October, it agreed to acquire Diamonds Direct USA for $490 million; in 2017, it bought diamond retail website James Allen for $328 million.

“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 Blue Nile CEO Sean Kell.

Meanwhile, Signet has reduced its sales guidance for the second quarter, which ended in late July, estimating revenue of $1.75 billion compared with an earlier forecast of $1.79 billion to $1.82 billion. Management cited “heightened pressure on consumers’ discretionary spending and increased macroeconomic headwinds.”

“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. The new outlook for the quarter still translates to a sales increase of around 25% compared with the equivalent period of 2019, before the Covid-19 pandemic, the executive noted.


Diamonds from Marange excluded by Blue Nile

Top US jewelry etailer Blue Nile has blacklisted Zimbabwean diamonds over reports of human rights abuses in Manicaland’s Marange district.

On its website Blue Nile says: “Blue Nile is committed to ensuring that the highest ethical standards are observed when sourcing our diamonds and jewelry. Because of the reported human rights abuses in Zimbabwe’s Marange diamond district, Blue Nile will not purchase or offer diamonds from that area. As a responsible member of the diamond and jewelry industry, we are working with our suppliers to ensure our consumers receive only the finest goods procured from ethical sources.”

It is not clear how long ago this statement was posted opn the Blue Nile website.

In a report on the website Blue Nile was quoted as stating that “it was doing this in adherence to global diamond watcher the Kimberley Process. If one of our suppliers was ever found to be in violation of that process, we would immediately sever that relationship,” the diamond trader was quoted.

The NGO, the Center for Natural Resource Governance (CNRG) welcomed Blue Nile’s decision. CNRG executive director Farai Maguwu called on Zimbabwean authorities and in particular Zimbabwe Consolidated Diamond Company owned by the State.

“We endorse the decision by Blue Nile. It is the right thing to do. The use of torture and murder as punishment to artisanal miners in Marange has been widely reported resulting in consumers raising a red flag,” Muguwu told in an interview.

Maguwu claimed that in 2018 alone, more than 40 artisanal miners were killed in cold blood by ZCDC guards. Since the discovery of diamonds in Marange in June 2006, the police and army have been accused of using brute force and live ammunition to deal with illegal diamond miners.

Source: idexonline