The acquisition of Diamonds Direct will give Signet a foothold in the “accessible luxury” space, Signet CEO Gina Drosos (pictured) tells JCK.
Signet announced earlier this week that it was buying the Charlotte, N.C.–based 22-store chain for $490 million from former owner Blackstone Tactical Opportunities.
Drosos says the acquisition stemmed from Signet’s search for ways to optimize its business.
“We always look for the white space, what places we could play, what customers could we attract if we had a different proposition,” she says. “That’s what Diamonds Direct represents for us. It’s a unique and differentiated banner aimed at a different part of the jewelry category.”
Signet already owns James Allen and Jared—two businesses that, like Diamonds Direct, target male consumers and do a lot of business in bridal. But Diamonds Direct has a very different business model, Drosos says.
“Our customer research says that the Diamonds Direct customer is different than both those banners,” says Drosos. “Jared is a full-service jeweler and does about half its business in bridal. James Allen is a diamond superstore online, with access to over 200,000 diamonds.
“Diamonds Direct is more of an in-store high-touch bridal experience. It appeals to a different kind of customer than Signet usually brings. We see them as distinct.”
With Signet becoming more aggressive in the digital area, Drosos believes it can upgrade Diamonds Direct’s digital capabilities.
“We see an opportunity for digital growth,” she says. “But our mantra is not to push any consumer into one method of interactivity with us. There are still a lot of customers in the jewelry category who prefer that face-to-face interaction.”
Signet has also been expanding into services. Drosos says that expansion might also represent an opportunity for her new purchase.
“They do a nice job with services today,” she says. “With the scale and the investment we have been making in services, from repair to custom design, there are things that we can help them with.”
Currently, Diamonds Direct has 22 stores in 13 states. Drosos expects to continue the company’s current slow-and-steady approach to expansion.
“They have a real smart strategy,” she says. “We want to continue that. I think there are opportunities for further stores. With some of the data that we have, and some of the data they have, we can help with that.”
Also this week, Signet dramatically raised its fiscal guidance, predicting comps will rise 10–12% this quarter.
“We originally had concerns about customers shifting to spending more on travel and experiences,” Drosos says. “We have not experienced that to date. We were also worried about the government stimulus running out. We have come through that with flying colors.”
She also notes that the high-end of Signet’s operating margin guidance (from 9.7% to 10.2% for the fiscal year) doubled its pre-pandemic operating margin.
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