Signet Jewelers (SIG) to Acquire Diamonds Direct for $490 Million in Cash, Raises 2022 Outlook

October 12, 2021 8:55 AM EDT

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Signet Jewelers (NYSE: SIG), the largest retailer of diamond jewelry in the world, announced it has reached an agreement to buy an off-mall US jeweler Diamonds Direct.

Signet will pay $490 million in cash to acquire Diamonds Direct and expects the deal to go through in the fourth quarter of Fiscal 2022.

"The accretive addition of Diamonds Direct to our portfolio will further drive shareholder value with its distinct bridal-focused shopping experience and add a new entry point as we build lifetime customer relationships and strive to reach our $9 billion revenue goal over time," said Signet CEO, Virginia C. Drosos.

"I am excited about Diamonds Direct joining the Signet family as we share a passion for company culture that prioritizes our team members, our customers and our community," said Itay Berger, President, Diamonds Direct. "We are thrilled to continue to grow our business, leveraging Signet's strengths and strategic capabilities to bring even more innovation and value to our signature shopping experience."

Furthermore, Signet raised its 2022 fiscal guidance. The company previously expected Q3 and FY sales of $1.26-$1.31 and $6.80-$6.95, respectively. The updated guidance is now calling for $1.42-$1.45 and $7.04-$7.19, respectively.

Q3 same stores were previously expected between -3% to 1%, which is now upgraded to 10% to 12%.

"As results to-date have exceeded expectations, we're raising our guidance on continued strong business momentum. Customers are showing positive response to our new product launches, and the reduction in government stimulus and customer shift to spending on entertainment and travel are having less impact than we previously anticipated," said Joan Hilson, Chief Financial and Strategy Officer.

As a result, shares of Signet are up 4% in pre-open Tuesday.

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