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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Windsor Regional gets donation of 40 “cuddly and very soft” teddy bears
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Windsor Regional gets donation of 40 “cuddly and very soft” teddy bears Photo by Nick Brancaccio / Windsor Star
Article content About 40 local children who find themselves being treated at Windsor Regional Hospital over the next few months will receive some furry comfort thanks to customers of the two local Peoples Jewellers stores.
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Article content On Wednesday, Tecumseh Mall and Devonshire Mall store manager Krystal Deschamps and assistant manager Fatima Mehdi donated 40 blue and grey bears to Windsor Regional Hospital’s Paediatric Child Life Services. We apologize, but this video has failed to load.
tap here to see other videos from our team. Try refreshing your browser, or Windsor Regional gets donation of 40 “cuddly and very soft” teddy bears Back to video The donations we get at Christmas usually last us several months “We always greatly appreciate receiving new stuffed animals. We do frequently hand them out to kids at the hospital, especially those who might forget to bring a comfort item to the hospital,” said Jen Burton-Liang, the Metropolitan Campus’s child life specialist. “They might come for surgery, they might come through the emergency department — or just to have something new and special and cuddly for them. We do hand them out a lot, so getting donations like this really keeps our supply up.” The People Jewellers Teddy Bear Project allows the company’s customers across the country to purchase the specially-designed bear and donate it to a hospital in their community.
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Article content Burton-Liang said the hospital gives out hundreds of teddy bears and other stuffed animals to children annually, including patients in the pediatric unit, diagnostic imaging and the emergency room. She said the Peoples bears were exceptional. “Those are really nice teddy bears, they’re really cuddly and very soft, and I think it brings a lot of comfort to kids that are hospitalized,” Burton-Liang said. Photo by Nick Brancaccio / Windsor Star If the hospital does happen to run out of donations, there are other ways to fill the gap. “The donations we get at Christmas usually last us several months,” Burton-Liang said. “Usually by the summer we’re looking again to get some donations to come in.” The hospital accepts stuffed animal donations from those as small as Beanie Babies to massive carnival-sized furry friends.
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Article content “Even the bigger ones, sometimes we have some that are huge and if the kid is having particularly difficult admission we might surprise them with a really huge stuffed animal,” Burton-Liang said. “Windsor’s a very generous community.” Burton-Liang said when they do run out of toys there are other agencies they can turn to. “Basically our entire Child Life program is funded through donations and different charitable organizations like Transition to Betterness, In Honour of the Ones We Love and We Care for Kids,” Burton-Liang said. “Our foundation is great, if we’re in need they always come through.”
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Police seek help after ring stolen from Devonshire Mall jewelry store
Windsor police are looking for a woman who reportedly stole a ring from Peoples Jewellers in Devonshire Mall.
Police say it took place on Wednesday around 12:15 p.m. A man and a woman entered the store and went in separate directions.
The female suspect approached the employee at the counter and asked to view a selection of diamond rings. Police say the suspect tried on a ring and was eventually asked to remove it from her finger, but she refused and then fled the store.
The man also fled the store moments later when confronted by a sales associate.
The suspect is described as a white woman, age 18 to 20 years old, 5’1”, with a slender build and shoulder length blonde hair. She was wearing a winter coat.