Zales Owner to Buy Blue Nile

Signet Jewelers (NYSE:SIG) said Tuesday that it will acquire online jewelry retailer Blue Nile for $360 million in an all-cash deal, in a bid to appeal to younger consumers and grow its bridal business.

Separately, Signet cut its financial forecast for the second quarter and full year fiscal 2023, given “heightened pressure on consumers’ discretionary spending” and other macroeconomic headwinds.

Chief Executive Officer Virginia Drosos said the company started to see softer sales in July as shoppers began to reign in their spending amid 40-year-high inflation.

The parent company of Zales, Jared and Kay Jewelers said it sees second-quarter revenue of about $1.75 billion and non-GAAP operating income totaling roughly $192 million.

The company now expects fiscal 2023 sales to be between $7.60 billion and $7.70 billion, down from a prior range of $8.03 billion to $8.25 billion.

It pegs annual non-GAAP operating income in a range of $787 million to $828 million, down from prior guidance of between $921 million and $974 million.

Signet said the revised figures do not take into account further material worsening of macroeconomic factors that could hurt consumer spending, nor its pending acquisition of Blue Nile.

Signet said the deal, which will be funded with cash on hand, is expected to close in the third quarter. It said the deal will likely not be accretive to the business, however, until the fourth quarter of fiscal 2024.

SIG shares docked $2.86, or 4.2%, to $64.81.