Preliminary talks about a possible merger between the Signet Group and Zale Corp.—the world’s two largest jewelry retailer groups—ended June 12, a day after the talks were revealed by a London newspaper.
“The preliminary discussions have been terminated,” Walker Boyd, Signet Group finance director, told JCK. “We acknowledge we had some discussions about a possible merger, but these talks have ended and gone no farther. … We won’t go into the issues of why or why not the talks ended. That should be left between the two companies.”
The talks between Signet and Zale were originally reported June 12, without attribution, in Britain’s TheMail on Sunday newspaper. Shortly after that, Signet’s board of directors issued a brief statement confirming the report. TheMail on Sunday report claimed Zale Corp. approached Signet a few months ago.
Previously, in an investor conference call, acting chief executive officer Betsy Burton said Zale was not for sale. “Why put the company up for sale when you have the opportunity to fix it and provide value to existing shareholders?” she asked.
Still, the ongoing turmoil at the company was evidenced by the fact that the two executives conducting the conference call both had “acting” in their titles—Burton and acting chief financial officer George Mihalko, who replaced Mark Lenz, currently on administrative leave for allegedly failing to disclose in a timely manner a delay in payments to vendors.
But even in the shadow of an SEC investigation of the company’s accounting practices, the call had an upbeat tone, particularly after third-quarter results that showed comp-store sales and revenues up 2.5 percent and 2.2 percent, respectively.
Burton also noted that Zale’s Mother’s Day comp sales were up “in the low double digits,” thanks to “resurgence in the diamond fashion and solitaire business,” which she says the previous team neglected in favor of gold and silver.
Burton says Zale is going “back to our core competency, which is diamonds,” and will reinstate its old slogan—also dropped last year—“the diamond store.”