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Leibish & Co

Tuesday, May 17, 2011

Will Signet Sell its U.K. Brands?

Signet Jewellers, the world’s largest specialty retail jeweler, is in talks with private equity companies about the possibility of selling interest in two of its U.K. retail jewelry chains, H Samuel and Ernest Jones, according to a report in the Sunday Telegraph.

Signet’s longtime financial advisors, Lazard Ltd., have initiated the talks, according to the report, which estimates that the two jewelry chains would sell for 400 million to 600 pounds ($650 million to $975 million).

Signet, based in Bermuda and listed on the New York Stock Exchange, owns jewelry chain operations in the U.K. and the U.S. in several markets. H.Samuel and Ernest Jones make up all of Signet’s 540 stores in the U.K., although Signet says it also owns the brands Leslie Davis, Forever Diamonds and Perfect Partner.

Signet’s U.K. business had sales of $693.2 million in fiscal 2011, accounting for 20 percent of its total company sales—a year-over-year decline of 5.5 percent. Same store sales fell 1.4 percent for the year.

H. Samuels has 338 stores with sales of 240 million pounds ($390 million) in 2011. It is listed as the number one specialty jewelry retailer store chain in the U.K, according to Signet’s website. Meanwhile, Ernst Jones consists of 202 stores with 2011 sales of 206 million pounds ($334.7 million). Signet says it is the top chain among the upper middle jewelry market in the U.K.

Signet operation in the U.S. consists of approximately 1,317 stores and accounts for 80 percent of total sales for the company. Its store brands in the U.S. include Kay Jewelers, Jared The Galleria Of Jewelry and a number of regional names.

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