Signet Jewelers Ltd. SIG chairman Gina Drosos recently appeared on Jim Cramer‘s ‘Mad Money’ to discuss the company’s recent $360 million acquisition of an online jewelry retailer Blue Nile.
The acquisition opens “a new consumer group” for the Hamilton, Bermuda-based company, Drosos explained. Blue Nile, which has been around for 20 years, had sales of over $500 million in 2021 and is a pioneer of online engagement rings with the highest brand awareness of any online-only retailer, she added.
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This isn’t Signet’s first acquisition. In 2017bought the company James Allen for $328 million.
Drosos expects numerous back office synergies between the two companies.
Signet also operates approximately 2,800 stores under a variety of brands including Kay Jewelers, Zales, Jared, Banter by Piercing Pagoda, Diamonds Direct, Rocksbox, Peoples Jewelers, H.Samuel and Ernest Jones.
While Signet aims to deliver consistent annual double-digit margins, there have been doubts in the past that this is possible in turbulent times.
However, the second-quarter results showed otherwise.
It’s also important to focus on capital allocation priorities as Signet continues to grow its market share by building new competitive advantages through the digital space and gathering data that other jewelers can’t match, Drosos said.
The company has also settled debts from the past, says Drosos, calling Signet undervalued.
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