Signet to Create an Enhanced Jewelry Shopping Experience
Integrated Across Its Online and Physical Platforms and All Retail
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HAMILTON, Bermuda--(BUSINESS WIRE)--
Signet Jewelers Limited ("Signet") (NYSE: SIG), the world’s largest
retailer of diamond jewelry, today announced that it has completed its
acquisition of R2Net, the owner of fast-growing online jewelry retailer
JamesAllen.com and Segoma Imaging Technologies. The acquisition brings
together Signet’s leading jewelry retail platforms with R2Net’s
world-class innovation capabilities and digital technology to accelerate
Signet’s execution of its Customer-First OmniChannel strategy, while
adding a fast-growing millennial online retail brand to Signet’s
portfolio.
“We are pleased with the rapid completion of the R2Net acquisition,
which supports our focus on enhancing OmniChannel consumer experience
and building a culture of innovation and agility across our
organization,” said Virginia C. Drosos, Chief Executive Officer of
Signet. “This strategic acquisition will allow us to accelerate digital
innovation and create an engaging and exciting shopping experience,
seamlessly integrated across Signet’s physical and online retail
platforms. Together with the R2Net team, we believe we can lead
transformation in the jewelry sector by digitizing how we engage,
communicate and serve consumers whenever and wherever they desire.”
JamesAllen.com’s sales grew by 2.5x in the last two years as consumers
have embraced the company’s innovative technologies that bring
simplicity, selection and overall value to the jewelry shopping process,
including:
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360° HD Diamond Display Technology: Every diamond on
JamesAllen.com is photographed with 15x or greater magnification in
360° HD, creating a seamless viewing experience for consumers to truly
experience the diamond’s quality, shape, cut, color, clarity and
sparkle.
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The Virtual Vault: The Virtual Vault is an advanced eCommerce
platform that includes over 150,000 diamonds sourced from around the
world, each displayed in an interactive 360° HD movie. The platform
exponentially increases the number of diamonds that consumers can
access in stores with the ability to manage inventory simultaneously
across the store fleet.
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24/7 Customer Service: JamesAllen.com’s diamond experts are
accessible online or via phone 24/7 to offer interactive customer
service, including the first-ever real-time diamond inspection service
where experts share their screen with customers.
Signet sees significant growth and value creation opportunities from the
implementation of R2Net’s technology across its physical and online
retail platforms. The implementation of select technologies will be
designed to ensure no disruption during the Holiday season. The
transaction is anticipated to be accretive to Signet’s earnings per
share (“EPS”) in the first full year of operations.
In Fiscal 2018, R2Net is expected to contribute approximately $80
million to $90 million to revenue and 130 to 140 basis points to same
store sales (“SSS”), while it will be neutral to EPS. Signet’s Fiscal
2018 guidance updated on August 24, 2017 includes costs associated with
the R2Net transaction, which are estimated to have a ($0.10) impact on
EPS. Going forward, R2Net’s financial results will be reported under
Signet’s Sterling operating segment and will be included in the
calculation of SSS.
As previously announced, R2Net brands will largely operate as an
independent division of Signet under the leadership of Oded Edelman. In
addition to this role, Mr. Edelman will become Chief Digital Innovation
Advisor of Signet, reporting directly to Ms. Drosos and assuming
responsibility for driving Signet’s digital innovation strategy.
Under the terms of the agreement, Signet paid $328 million in cash,
subject to customary post-closing adjustments provided in the agreement.
The transaction was financed with a term loan provided by JPMorgan Chase
Bank, N.A., which is expected to be repaid in full by the end of fiscal
2018. As a sign of commitment to the long-term vision of Signet and
R2Net, Mr. Edelman and the R2Net founders have agreed to invest a
portion of their transaction proceeds in Signet shares.
About Signet Jewelers and Safe Harbor Statement:
Signet Jewelers Limited is the world's largest retailer of diamond
jewelry. Signet operates approximately 3,600 stores primarily under the
name brands of Kay Jewelers, Zales, Jared The Galleria Of Jewelry,
H.Samuel, Ernest Jones, Peoples and Piercing Pagoda. Further information
on Signet is available at www.signetjewelers.com.
See also www.kay.com,
www.zales.com,
www.jared.com,
www.hsamuel.co.uk,
www.ernestjones.co.uk,www.peoplesjewellers.com
and www.pagoda.com.
This release contains statements which are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. These statements, based upon management’s beliefs and expectations
as well as on assumptions made by and data currently available to
management, appear in a number of places throughout this document and
include statements regarding, among other things, Signet’s results of
operation, financial condition, liquidity, prospects, growth, strategies
and the industry in which Signet operates. The use of the words
“expects,” “intends,” “anticipates,” “estimates,” “predicts,”
“believes,” “should,” “potential,” “may,” “forecast,” “objective,”
“plan,” or “target,” and other similar expressions are intended to
identify forward-looking statements. These forward-looking statements
are not guarantees of future performance and are subject to a number of
risks and uncertainties, including the costs and benefits of the
transaction, including future financial and operating results, Signet’s
plans, objectives, expectations and intentions, and other statements
that are not historical facts. Among the risks and uncertainties that
could cause actual results to differ from those described in the
forward-looking statements include the occurrence of any event, change
or other circumstance that could give rise to the termination of the
merger agreement, the risk that necessary regulatory approvals may not
be obtained or may be obtained subject to conditions that are not
anticipated, risks that any of the closing conditions to the proposed
transaction may not be satisfied in a timely manner, risks that
financing may not be repaid in the expected time frame, the impact of
hurricanes on Signet’s business, general economic conditions, regulatory
changes following the United Kingdom’s announcement to exit from
the European Union, a decline in consumer spending, the merchandising,
pricing and inventory policies followed by Signet, the reputation of
Signet and its brands, the level of competition in the jewelry sector,
the cost and availability of diamonds, gold and other precious metals,
regulations relating to customer credit, seasonality of Signet’s
business, financial market risks, deterioration in customers’ financial
condition, exchange rate fluctuations, changes in Signet’s credit
rating, changes in consumer attitudes regarding jewelry, management of
social, ethical and environmental risks, security breaches and other
disruptions to Signet’s information technology infrastructure and
databases, inadequacy in and disruptions to internal controls and
systems, changes in assumptions used in making accounting estimates
relating to items such as extended service plans and pensions, risks
related to Signet being a Bermuda corporation, the impact of the
acquisition of Zale Corporation on relationships, including with
employees, suppliers, customers and competitors, and our ability to
successfully integrate Zale Corporation’s operations and to realize
synergies from the transaction.
For a discussion of these and other risks and uncertainties which could
cause actual results to differ materially from those expressed in any
forward-looking statement, see the “Risk Factors” section of Signet's
Fiscal 2017 Annual Report on Form 10-K filed with the SEC on March 16,
2017. Signet undertakes no obligation to update or revise any
forward-looking statements to reflect subsequent events or
circumstances, except as required by law.
About R2Net
R2Net (conceived as "Rough Diamonds to Internet"), which owns
JamesAllen.com, operates a robust e-commerce and supply chain platform
that connects the entire span of the diamond industry’s ecosystem,
including manufacturers, retailers and consumers. R2Net owns and
operates four distinct brands: JamesAllen.com, Segoma, D-Market (Diamond
Market) and Brio Animation Studio. R2Net provides highly magnified 360°
HD images of diamonds to diamond polishers, and then displays them on
its D-Market and JamesAllen.com platforms, allowing retailers,
manufacturers and consumers to transact digitally without the high
expenses and time delays associated with traditional brick & mortar
alternatives.
JamesAllen.com, one of the fastest growing online retailers of
engagement rings and loose diamonds, has grown its sales by more than
2.5x in the last two years as consumers have embraced the company’s use
of technology to bring simplicity, selection, pricing transparency and
overall value to the engagement ring shopping process. JamesAllen.com
visitors can shop directly for the exact diamond they want and then
design or customize their own personalized jewelry pieces. Using the
company’s proprietary Diamond Display Technology, consumers can view
each of the site’s 150,000+ conflict-free, fully certified loose
diamonds, as well as hundreds of ring settings, in 360° HD and zoomed up
to 40x. JamesAllen.com operates almost exclusively online, with the
exception of its by-invitation-only showroom in New York City.
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Source: Signet Jewelers