Signet Jewelers
Reckoning
Signet is the world's largest retailer of diamond jewelry. With 2,700 stores worldwide, major brands under the company portfolio are:
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​KAY Jewelers
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Zales
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Jared
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Banter by Piercing Pagoda
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Diamonds Direct
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Blue Nile
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James Allen
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Rocksbox
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Peoples Jewellers
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H.Samuel and
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Ernest Jones.
Kay, Zales and Jared contributed 71% of revenue in FY-2024.
Bridal and fashion jewellery revenue mix were 44% & 38% respectively.
United States and United Kingdom are the company key markets. ​
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Major acquisitions made by the company between 2012-2022 were Ultra Stores, Zales, R2Net, Rocksbox, Diamond Direct and Blue Niles.​
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Business - Fiscal Year January
Revenue rose sharply from $5.2B to $7.8B between FY2021 & FY2022.
Diamond Direct and Blue Niles acquisition during the period likely contributed about $250M.
Revenge spending between 2021 & 2022 led to a sharp rise in natural diamond prices. The rapid adoption of Lab Grown Diamond was also another contributing factor.
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Natural diamond price correction began in Apr-2022 and continues into 1H-2024. Meanwhile increased supply of LGD have led to sharp price erosion at manufacturing and wholesale. From 80% of natural diamond prices, LGD is trending between 20%~25% of natural prices.
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Key United States market has remained relatively resilient and China market is still suffering from post-Covid reopening weakness. India and UAE are considered growth markets, but are still dwarfed by United States and China.
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Opinion
The euphoric party for diamond traders from producers (miners) to retailers started to unwind sometime from Apr-2022. Price for natural diamond is going through a period of correction and volume is trending towards a new normal due to LGD disruption.
LGD volume have grown significantly but this is largely negated by the sharp fall in prices. This will likely lead to LGD gradually settling as fashion jewelry. Major beneficiary of this trend would be fashion jewellery companies like Pandora and Swarovski.
Note: LGD at 80% of Natural Diamond prices would only need to increase volume by 25% to achieve revenue parity. At 20% or 25% of natural diamond prices, volume would need to increase by 300% to 400% which will be challenging in the short-run.
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This unwinding process will require a little more time to run its course. Big players like Signet with broad bridal & fashion segments will remain more resilient relative to mid-size firms. As more wholesalers & retailers exit the business, this will gradually strengthen the position of players with deep pocket.
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This new normal will benefits focused fashion jewellers. It also open up opportunities for service providers that helps producers, manufacturers and retailers improve productivity and reduce cost of business.