Acquisitions and divestitures

9 Months Ended

Oct. 28, 2023

Business Combination and Asset Acquisition [Abstract]

UK Prestige Watch Business

On October 18, 2023, the Company entered into an agreement to sell the operations and certain assets of the Company’s UK prestige watch business in the International reportable segment, including 21 retail locations. The closing of the sale was substantially completed on November 17, 2023, for initial proceeds of approximately $53 million and resulted in a pre-tax gain of approximately $12 million. The transaction is subject to certain customary post-closing conditions and adjustments which are expected to be completed by January 2024.

Based on the above sale, during the third quarter of Fiscal 2024, the Company determined the UK prestige watch business met the criteria to be classified as held for sale. The business did not meet the criteria to be classified as discontinued operations as the disposal does not represent a strategic shift that will have a major effect on the Company's operations. The related assets and liabilities expected to be disposed of have been presented as held for sale as of October 28, 2023, recorded within other current assets and other current liabilities in the condensed consolidated balance sheet and consist of the following:


(in millions)
Inventories	$	33.4
Property, plant and equipment	9.6
Operating lease right-of-use assets	19.8
Assets held for sale	$	62.8

Operating lease liabilities	$	21.4
Liabilities held for sale	$	21.4

Service Jewelry & Repair

On July 11, 2023, the Company acquired certain assets of Service Jewelry & Repair, Inc. (“SJR”). SJR is a leader in jewelry and watch repair to both consumers and businesses. Total cash consideration was $6.0 million. The SJR acquisition was driven by Signet's Inspiring Brilliance strategy and its initiatives to accelerate growth in its services offerings. Net assets acquired primarily consist of inventory and goodwill.

Blue Nile

On August 19, 2022, the Company acquired all of the outstanding shares of Blue Nile, Inc. (“Blue Nile”), subject to the terms of a stock purchase agreement entered into on August 5, 2022. The total cash consideration was $389.9 million, net of cash acquired of $16.6 million, including purchase price adjustments for working capital.

Blue Nile is a leading online retailer of engagement rings and fine jewelry. The strategic acquisition of Blue Nile accelerated Signet's initiative to expand its bridal offerings and grow its accessible luxury portfolio while enhancing its connected commerce capabilities as well as extending its digital leadership across the jewelry category – all while further achieving meaningful operating synergies to enhance shopping experiences for consumers and create value for shareholders.

The information included herein has been prepared based on the allocation of the purchase price using estimates of the fair value and useful lives of assets acquired and liabilities assumed which were determined by management using a combination of income and cost approaches, including the relief from royalty method and replacement cost method.

The following table presents the estimated fair value of the assets acquired and liabilities assumed from Blue Nile at the date of acquisition:


(in millions)
Inventories	$	85.8
Property, plant and equipment	33.1
Operating lease right-of-use assets	39.1
Intangible assets	96.0
Other assets	23.6
Identifiable assets acquired	277.6

Accounts payable	71.6
Deferred revenue	16.5
Operating lease liabilities	38.5

Other liabilities	17.9
Liabilities assumed	144.5
Identifiable net assets acquired	133.1
Goodwill	256.8
Net assets acquired	$	389.9

The Company recorded acquired intangible assets of $96.0 million, consisting entirely of an indefinite-lived trade name. In addition, the Company acquired federal net operating loss and other carryforwards of approximately $90 million and $71 million, respectively. Such amounts are subject to certain limitations under Section 382 of the Internal Revenue Code, and generally do not expire.

Goodwill is calculated as the excess of the purchase price over the estimated fair values of the assets acquired and the liabilities assumed in the acquisition and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The amount allocated to goodwill associated with the Blue Nile acquisition is primarily the result of expected synergies resulting from combining the merchandising and sourcing activities of the Company’s digital banners, as well as efficiencies in marketing and other aspects of the combined operations. The Company allocated goodwill to its North America reportable segment. None of the goodwill associated with this transaction is deductible for income tax purposes.

The results of Blue Nile subsequent to the acquisition date are reported as a component of the North America reportable segment. Pro forma results of operations have not been presented, as the impact on the Company’s consolidated financial results was not material.

Sasmat

On June 16, 2022, the Company acquired a 25% interest in Sasmat Retail, S.L (“Sasmat”) for $17.1 million in cash. Sasmat is a Spanish jewelry retailer specializing in online selling, with eleven brick and mortar locations. Under the terms of the agreement, the Company has the option to acquire the remaining 75% of Sasmat exercisable at the earlier of three years or upon Sasmat reaching certain revenue targets as defined in the agreement. The Company is applying the equity method of accounting to the Sasmat investment. The Sasmat investment is recorded within other non-current assets in the condensed consolidated balance sheets. The Sasmat investment did not have a material impact on Signet’s condensed consolidated statements of operations during the periods presented.