The Watches of Switzerland Group announced in its quarterly financial report for the August to October quarter that it had acquired 19 Ernest Jones stores from Signet Jewelers, but no details of the transaction were provided.
Signet Jewelers has shared additional details in its latest quarterly report, saying it completed selling 15 primarily luxury watch stores, within the Ernest Jones banner, to the Watches of Switzerland Group, with the potential for up to six additional retail locations by the end of the fourth quarter.
The accretive sale multiple from the 15 stores generated proceeds of approximately $53 million, the company discloses.
Signet expects an additional $25 million of revenue from the transaction in Q4.
There is a slight discrepancy between the Watches of Switzerland Group and Signet Jewelers reporting of the transaction, most likely due to phasing of completed transfers.
Watches of Switzerland reported buying 14 multibrand showrooms and five monobrand boutiques in its report for the quarter ended October 30.
Signet describes the sold stores as “the divestiture of a non-strategic business”, which allows Signet to more quickly apply key elements of its UK transformation plan.
The details emerged within Signet Jewelers’ Q3 report, which showed same store sales for H. Samuel and Ernest Jones down by 4.6% year-on-year to $94 million.
Turnover dropped more sharply in the United States, with same store sales down by 12.3% to $1.3 billion.
The group is forecasting fully year sales of $7.07 billion to $7.27 billion despite headwinds in engagements.
Bridal overall, inclusive of engagements, historically represents nearly 50% of Signet’s merchandise sales.
Within the Signet Jewelers portfolio of retail brands, Ernest Jones relies most heavily on premium watch sales, although it lacks the pulling power of a top five Swiss watchmaker to anchor its showrooms.
Ernest Jones has moved closer to Richemont, opening boutiques for the likes of IWC and Panerai, but lacks the competitive edge that Rolex, Patek Philippe, Cartier, Omega and Breitling bring to rivals.
