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The acquisition will make Signet the largest jewellery chain in the world
The acquisition will make Signet the largest jewellery chain in the world
 










Jewellery merger creates world’s largest retailer

Signet Jewelers’ recent acquisition of long time rival Zale Corporation will make it the largest jewellery chain in the world, with six recognisable retail brands across three countries.

The deal, said to be worth US$1.4 billion (AU$1.56 b), will combine Signet’s 1,974 retail stores (located across America and the United Kingdom) with 1,679 from Zale (located across America, Canada and Puerto Rico) for a total of 3,653 outlets – well above the 2,000 stores for China’s Chow Tai Fook.

The acquisition covers all elements of Zale including the Zale’s chain, Gordon’s, Piercing Pagoda and Zale Canada (which includes Peoples and Mappins). This will reportedly make Signet the largest jewellery retailer in the United States, the United Kingdom and Canada. 

A joint announcement noted that the Zale stores would continue to trade under their current name, with chief executive Theo Killion holding his current position but now reporting to Signet CEO Mike Barnes.

Theo Killion, CEO of Zales
Theo Killion, CEO of Zales
Mike Barnes, Signet CEO
Mike Barnes, Signet CEO
“The addition of Zale to the Signet family is consistent with our long-term growth strategy and leverages our combined operating expertise to create better choices for our customers, new opportunities for our employees and makes us a more attractive partner to our vendors,” Barnes said.

“In addition, it allows us to better optimise our balance sheet, creating long-term value for our shareholders. We are excited about the prospects for the combined company and the many opportunities that this creates for our future.”

Barnes added the acquisition would give Signet greater access to mid-range jewellery customers and increase overall buying power. He also believed that through optimised marketing and promotional spending, investing in store remodels, and improving IT infrastructure will improve margins in the Zale’s stores.

The takeover will bring Zale's nine decades as an independent company to an end. The business was founded in 1924 by brothers M.B. and William Zale in Wichita Falls, Texas, and pioneered the sale of jewellery to the working class. It continued to trade well until 2005 when it made an “ill-fated” decision to offer more up-scale items. 

It was widely reported that customers turned away as a result and the company was left short of funds. Since then, it has remained the subject of many rumoured takeovers and buy-outs.  

Signet, meanwhile, made its name in the United Kingdom post World War II and only moved into the American market in 1987. A series of clever buying and branding decisions has seen it rise to the largest jewellery retailer in America.

The company’s current portfolio consists of US-based Kay Jewelers, Jared the Galleria of Jewelry and a number of regional brands and UK-based H. Samuel and Ernest Jones.

The transaction is subject to Zale stockholder approval, certain regulatory approvals and customary closing conditions. It is expected to be finalised this year.
















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Monday, 11 December, 2017 02:59pm
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