Signet Jewelers Limited (NYSE: SIG) acquired Rocksbox Inc. for an undisclosed price on Tuesday. The acquisition will help the owner of prominent brands like Zales and Kay Jewelers to debut in the jewellery rental business.
Signet Jewelers shares jumped roughly 3.5% on market open on Tuesday, touching an intraday high of £44.45 per share. Later in the day, however, the stock lost the entire gain and closed the regular session at a per-share price of £41.88. Signet remained flat in after-hours trading on Tuesday.
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In comparison, the Hamilton-headquartered company had started the year at a much lower £19.99 per share. Here’s what you need to know about why prices rise and fall in the stock market.
Rocksbox’s jewellery is modestly priced
Rocksbox is a subscription service that costs £15.18 per month and allows customers to borrow jewellery, three pieces at a time. Should a customer choose to buy the jewellery they rented, the subscription fee is deducted from the total cost of the piece.
As per Rocksbox, close to 50% of its customers end up purchasing the jewellery they rented. Compared to Signet, Rocksbox’s jewellery is modestly priced between £36 and £109.
In separate news from the United States, Southwest Airlines said on Tuesday it recalled 209 pilots from voluntary leaves as demand recovered after a massive hit from the COVID-19 crisis last year.
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CEO Virginia Drosos of Signet comments on the acquisition
Chief Executive Virginia Drosos of Signet commented on the news on Tuesday and said:
“I’m delighted to welcome the talented Rocksbox team to our Signet family and am confident this union will generate exciting opportunities to accelerate our growth in services and reach new customers. Under CEO Meaghan Rose’s leadership, Rocksbox has revolutionized the jewellery rental subscription marketplace by delivering personalized, online and data-driven customer experiences for jewellery lovers who prioritize fashion, online convenience and sustainability. We look forward to bringing Rocksbox’s outstanding services to more customers, and to introducing those new customers to the balance of Signet’s banners.”
Signet currently operates a massive network comprising 2,800 stores that offer jewellery repair and ear-piercing services. Drosos, however, wants the company to expand its footprint in other services.
Signet Jewelers performed largely upbeat in the stock market last year with an annual gain of close to 50%. At the time of writing, the world’s largest retailer of diamond jewellery is valued at £2.19 billion.
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