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SIG - Signet Jewelers News Story

$65.01 -0.0  -0.0%

Last Trade - 07/05/21

Sector
Consumer Cyclicals
Size
Mid Cap
Market Cap £2.45bn
Enterprise Value £1.71bn
Revenue £3.76bn
Position in Universe 1749th / 6854

BREAKINGVIEWS-Capital Calls-Rent-a-bling deal shines up Signet

Tue 6th April, 2021 8:04pm
(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
    NEW YORK, April 6 (Reuters Breakingviews) - Concise insights
on global finance in the Covid-19 era.
 
    -------------------------------------------------
DEAL CHARMS. Signet Jewelers  SIG.N  is upping its bling. The
owner of lower-end diamond retailers Kay and Zales said Tuesday
it was buying jewelry rental firm Rocksbox https://www.signetjewelers.com/investors/financial-news-releases/financial-news-release/2021/Signet-Jewelers-Boosts-Services-Offerings-with-Acquisition-of-Rocksbox-the-Leading-Jewelry-Rental-Subscription-Platform/default.aspx.
 With roughly half of its revenue coming from bridal jewelry –
and brick-and-mortar retailers going broke  urn:newsml:reuters.com:*:nL5N2CA3BZ –
changing course is probably Signet's best next step. 
    The $3 billion firm’s revenue fell 15% https://www.sec.gov/ix?doc=/Archives/edgar/data/832988/000083298821000025/sig-20210130.htm
 in the year ended Jan. 30, and it wasn’t solely
pandemic-related. Sales have been on a decline for several
years. Despite shares rocketing ninefold in the past year, its
enterprise value-to-EBITDA multiple of around 8 times is half
that of Coach owner Tapestry  TPR.N . LVMH  LVMH.PA  is valued
almost three times as highly.
    Rocksbox, which charges $21 a month https://www.wsj.com/articles/signet-is-buying-rocksbox-in-a-bet-on-jewelry-rentals-11617706200
 to rent its baubles, can make Signet more like RealReal
 REAL.O , an online second-hand designer clothes retailer
 urn:newsml:reuters.com:*:nL8N2IR3L0. Assuming that users will be interested in renting
Zales’ Unstoppable Heart Shaped Pendant might be a stretch.
Still, RealReal has roughly 6% of Signet’s revenue but a market
capitalization about two-thirds as large. For Signet, that
promises more than a spit shine. (By Jennifer Saba and Lauren
Silva Laughlin) 
    On Twitter http://twitter.com/breakingviews
    
    Earlier in Capital Calls:
    
    Dolce & Gabbana not such a sweet morsel  urn:newsml:reuters.com:*:nL4N2LZ35U 
    Michael Eisner’s comeback  urn:newsml:reuters.com:*:nL1N2LZ1CT
    SoftBank’s latest robotic bet looks logical  urn:newsml:reuters.com:*:nL4N2LZ29V 
    Suez waste sale throws garbage at Veolia bid  urn:newsml:reuters.com:*:nL4N2LZ281
    Google’s legal win against Oracle  urn:newsml:reuters.com:*:nL1N2LY135

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| Editing by Richard Beales and Amanda Gomez)
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