Signet Jewelers (NYSE: SIG) has signed a deal to buy jewelry retailer Zale (NYSE:ZLC), the companies said Wednesday. The combination would create a giant, stand-alone jewelry chain across the U.S., U.K. and Canada with sales of $6.2 billion.
Signet, which has 1,400 stores in the U.S. and 500 in the U.K., has agreed to take over Zale, which has 1,680 stores in the U.S., Canada and Puerto Rico, in a transaction worth a value of $1.4 billion.
Mike Barnes, Signet CEO, said that the acquisition strengthens Signet's portfolio and extends the company's international footprint. Signet intends for Zale to continue to run under the direction of its current CEO, Theo Killion, who will report to Barnes once the deal is finalized.
Signet Jewelers, based in Bermuda, has resonated more strongly with customers in recent years as the owner of Jared the Galleria of Jewelry with its "He went to Jared" slogan and Kay Jewelers with its "Every Kiss Begins With Kay" ads. By division, the same-store sales at Kay rose 5.6 percent, as Jared sales were up 5.6 percent during November and December combined. Signet also operates H. Samuel and Ernest Jones stores in the U.K.
Dallas-based Zale Corp. has 1,680 stores in North America under Zales, Gordon's and other names. The struggling company, which went through a liquidity crisis in 2009, has closed more than 400 stores in recent years in an attempt to return to profitability. Most recently, the company reported sales at stores open at least one year rose 2 percent in November and December.
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