Peoples Jewellers owner bought for US$1.4B in deal that could bring Kay Jewellers to Canada
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Peoples Jewellers owner bought for US$1.4B in deal that could bring Kay Jewellers to Canada Two of the U.S.' biggest diamond sellers — including the owner of Canada’s Peoples Jewellers and Mappins — have agreed to a multi-million dollar marriage of convenience
Article content Two of the U.S.’ biggest diamond sellers — including the owner of Canada’s Peoples Jewellers and Mappins — have agreed to a multi-million dollar marriage of convenience.
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Article content Signet Jewelers Ltd.’s acquisition of Zale Corporation, a deal valued at US$1.4-billion including debt, is the latest sign of industry consolidation as chains and mom-and-pop shops increasingly battle online upstarts for customers. We apologize, but this video has failed to load.
tap here to see other videos from our team. Try refreshing your browser, or Peoples Jewellers owner bought for US$1.4B in deal that could bring Kay Jewellers to Canada Back to video The top two U.S. mid-priced jewellers announced Wednesday they have entered into an agreement in which Signet will acquire all of its smaller rival’s issued and outstanding stock at US$21 in cash per share, a 41% premium over the closing price on the New York Stock Exchange a day earlier. With this acquisition Signet, the largest specialty retailer in the U.S. and the U.K., boosts its store locations from 1,900 to 3,600 and becomes the leading trinket retailer in Canada, said Mike Barnes, the chief executive and director of Signet Jewelers.
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Article content “We are not only number one in the U.S. and the U.K.; this acquisition will also make our newly combined company number one in Canada as well and it will allow us to continue building a platform for potential future geographic expansion,” he said during a conference call Wednesday. Investors seemed to like the pairing as Zale stock rose more than 40% to close at $20.92 on the New York Stock Exchange — impressive given that it hovered as low as $3.80 last March. Signet’s stock rose 18% Wednesday. The combined company will generate approximately US$6-billion in sales and more than $700-million in EBITDA, and will have nearly 30,000 associates, Mr. Barnes said. With Signet’s jewellery brands Kay and Jared, which are leaders in the mid-priced and the upper-mid-priced segments, the addition of Zale’s equally mall-friendly brands “will help us maximize our midmarket success,” he said.
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Article content The new company is also expected to see $100-million in synergies by the third year of operation, in large part due to stronger buying power and cost improvements, Signet executives said on the conference call. The Zale brand will operate as a separate standalone division within Signet, led by Zale’s chief executive Theo Killion. This acquisition, subject to shareholder approval, would cap what has been a tumultuous run over the years for Zale, and Peoples Jewellery. Peoples was founded in Toronto 1919 by the Gerstein family, which grew the business over the following decades into a chain of jewellery stores with as many as 280 locations by the 1980s. In 1986, Peoples teamed up with Switzerland’s Swarovski International to swing the junk-bond financed US$650-million purchase of Zale, which at the time was a firm more than five times its size. In 1989, the company later bought Gordon Jewelry Corp for US$311-million.
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Article content But after recession hit in the early 1990s, combined with high interest payments, Zale was pushed to the brink, filing for bankruptcy in 1992. In 1993, Peoples followed it down. In an odd twist, by 1999, a stronger, financially-healthier Zale bought Peoples Jewellery for US$115-million. Many years later, consolidation in the jewellery industry at all price points continues, said David Wu, luxury goods analyst at Telsey Advisory Group in New York. Hamilton, Bermuda-based Signet had previously discussed buying Zale but those talks ended in 2006 after Zale’s board decided to stay independent, according to Bloomberg. After Zale saw slumping sales in recent years, it embarked on a multi-year restructuring which is “starting to bear fruit”, said Mr. Wu, drawing a suitor.
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Article content Zale Corp.’s holiday sales results showed overall comparable store sales up 2%, with Zales’ branded stores up 4.4% and Peoples performing strongly at 2%. Mappins, however, saw sales drop more than 6%. In both Canada and the U.S., this sector of retail remains fragmented with independent retailers and mom-and-pop stores competing with the jewellery giants, but consolidation is increasing as chains look to benefit from economies of scale. “Consolidation has been happening, but at a very slow pace,” Mr. Wu. said. “This acquisition does speed up the pace.” The U.S. jewellery industry is also consolidating as stores face online challengers such as Blue Nile Inc., Ken Gassman, president of the Jewelry Industry Research Institute, told Bloomberg. Mr. Wu said the deal potentially allows to roll out its brands north of the border and providing Zale with access to “best in class” management. “It really gives Signet an entry way into the Canadian market,” he said. “I wouldn’t be surprised if Signet uses some of the real estate it currently has in Canada and potentially convert some of the underperforming Mappins stores into potentially a Kay store or a Jared store…. which I think would be very well-received.” With files from Bloomberg
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Hong Kong politician Regina Ip puts diamond Rolex up as part of HK$1 million vaccination lottery for members, ‘friends’ of her party
New People’s Party chairwoman Regina Ip poses with a Rolex to be offered up in a lottery for vaccinated party allies. Photo: Sam Tsang
Jennifer Lopez Sparkles in Forevermark Diamonds at the 2020 People’s Choice Awards
Rob Zangardi & Mariel Haenn, Jennifer’s stylists said of the ensemble, “For Jennifer, recipient of the People’s Icon Award, we wanted to give her a feminine yet glamorous look and knew these asscher cut earrings from Forevermark by Rahaminov would be the perfect complement.”
Forevermark diamond looks at the 2020 People’s Choice Awards include:
Who: Actor/Singer/Producer Jennifer Lopez, People’s Choice Awards Recipient, People’s Icon of 2020
The Look:
Forevermark by Rahaminov Asscher Diamond Drop Earrings set in Platinum 36.10 ctw
Asscher Diamond Drop Earrings set in Platinum 36.10 ctw Forevermark Black Label Square Diamond Bangle Set in 18K White Gold 2.25 ctw
Notes to Editors:
ABOUT FOREVERMARK
Every Forevermark diamond undergoes a journey of rigorous selection. Our unique inscription is an assurance that every Forevermark diamond meets the exceptional standards of beauty, rarity and is responsibly sourced.
FOREVERMARK DIAMONDS BEYOND the 4Cs
Every Forevermark diamond is a natural, unique and a precious gift of nature. Forevermark goes beyond the standard 4Cs to select diamonds that are genuine and untreated. Forevermark diamonds are cut and polished by master craftsmen to reveal their ultimate beauty and natural brilliance.
FOREVERMARK DIAMONDS ARE RARE
Less than one per cent of the world’s natural diamonds are eligible to be inscribed as Forevermark.
FOREVERMARK DIAMONDS ARE RESPONSIBLY SOURCED
Each Forevermark diamond is responsibly sourced and embodies our principles of integrity, striving to create opportunities for women and our dedication to protection of the natural world. The inscription is an assurance of the physical integrity of our diamonds throughout their journey, as well as the conscientious integrity with which we run our business.
FOREVERMARK INSCRIPTION & GRADING
Each Forevermark diamond is inscribed with an icon and individual number as an assurance that it has met Forevermark’s standards of beauty and rarity and that it is responsibly sourced. The Forevermark inscription is placed on the table facet of a Forevermark diamond. Invisible to the naked eye, the inscription is 1/5000th of a human hair and can only be seen using a special Forevermark viewer available at Authorised Forevermark Jewellers. Authorised Forevermark Jewellers are able to supply a Forevermark Diamond Grading Report to their customers providing an accurate blueprint of the qualities - cut, colour, clarity and caratage - of each Forevermark diamond. Forevermark is the diamond brand from De Beers Group and benefits from over 130 years of diamond expertise. Forevermark diamonds are carefully selected and come from sources committed to high standards; they are beautifully crafted by a select group of Diamantaires and exclusively available from select Authorised Forevermark Jewellers. For more information and to find your nearest Authorised Forevermark Jeweller go to www.forevermark.com
SOURCE Forevermark
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