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Private Equity Firm Invests $625M in Signet

Jeweler Cuts Guidance as 2Q Sales Fall

Aug 25, 2016 9:52 AM   By Rapaport News
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RAPAPORT... Signet Jewelers announced a $625 million investment from private equity firm Leonard Green & Partners (LGP).

LGP will make the investment by buying convertible preferred shares, with the proceeds going to finance a repurchase of up to $625 million in common stock.

Signet, the world’s largest retailer of diamond jewelry, will appoint Jonathan Sokoloff, one of LGP’s two managing partners, to its board. This will come about after the deal is closed, which is expected in the third fiscal quarter of 2017.

LGP, headquartered in Los Angeles, is a private equity house with a track record of acquiring stakes in the U.S. retail and consumer sector. Investments to date include burger-stand chain Shake Shack and retailer The Container Store.

“For more than 25 years, Leonard Green has successfully partnered with some of the best known companies in the retail sector and worked to create significant shareholder value,” said Mark Light, Signet’s chief executive officer (pictured).

“We view Leonard Green’s significant investment in Signet as a strong vote of confidence in our business and its long term growth prospects.”

Meanwhile, in a separate statement, Signet announced a 2.6 percent decline in sales to $1.37 billion in its second fiscal quarter that ended July 30. Same-store sales fell 2.3 percent. A 5.4 percent sales drop at Jared outweighed a 0.7 percent increase at Kay, while revenue from the Zale division rose marginally. Total sales in the U.K. division, comprising H. Samuel and Ernest Jones, retreated 8.7 percent. However, profit jumped 32 percent to $81.9 million.

Adjusting its outlook downward, the retailer now forecasts full-year same-store sales will decline 1 percent to 2.5 percent, in contrast to an earlier forecast of a 2 percent to 3.5 percent rise.

First-half sales crept up 0.4 percent to $2.94 billion.
Tags: ernest jones, H. Samuel, Jared, Leonard Green & Partners, LGP, private equity, Rapaport News, Signet, Signet Jewelers, Zale
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