Signet Jewelers set to buy online brand Blue Nile for $360 million

Signet Jewelers will acquire Blue Nile for $360 million in all cash, right before Blue Nile reached its deadline to file to go public via SPAC.

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RACHELLE AKUFFO: I'll kick us off with Signet Jewelers. That's the parent company of Zales, Jared, and Kay Jewelers. And they're buying rival online retailer Blue Nile for $360 million, all cash. And this is just before the deadline for Blue Nile to go public via SPAC.

Now, the acquisition will close in Q3 of fiscal 2023. The stock is down, though, today, as Signet cut its second quarter and full year fiscal 2023 forecast with CEO Virginia Drosos citing softness in consumer spending for July and beyond due to inflation.

Now, the stock is actually down 32% year to date. But Signet hopes that this deal will attract more bridal consumers and importantly, younger shoppers. Now, is this great timing as the '80s status symbol, the tennis bracelet, making a comeback with younger buyers thanks to a lot of influencers. But this time, they're more affordable, sustainable, and with more color options. So I guess you could be glamorous on a budget thanks to this new trend, Seana.

SEANA SMITH: Yeah, and of course, the lab-grown diamonds making it a little bit more affordable for a lot of people out there-- not just the tennis bracelets which certainly have seen a surge in popularity, but also engagement rings. People really going towards this trend.

Rachelle, it's interesting, though, when you take a look at what's happening in the jewelry space. I think-- what are we looking at there? That might be someone trying on rings. But in terms of the demand that's happening in the jewelry space, you mentioned the softness that Signet did say that they are starting to see.

We don't see inflation abating at least any time soon. Obviously, it will be an issue here in the current quarter for the company. Looking out ahead, Blue Nile could be a smart play as they do try to appeal and attract that younger audience which we know is a little bit more open to buying fine jewelry, to buying diamonds online.