Although Facebook’s purchase of WhatsApp has dominated the business headlines over the past week, Signet Jewelers’ imminent acquisition of close competitor Zale Corp will be a much larger transaction in terms of the acquired company’s revenues. The latter also represents the most significant shift in global jewellery competition since brand Bvlgari was acquired in 2011. Apart from changing the global hierarchy, I expect this acquisition to prompt strategy reforms for leading players across North America. In this opinion piece, I evaluate the development’s effect on three distinct geographical levels.
Global Leadership Race
As of 2012, Chow Tai Fook and Richemont were the two largest jewellery players in the world, with Signet ranked a distant third. However, Signet and Zale combined accounted for a 2% retail value share of global jewellery sales in 2012, propelling the alliance above Richemont into second place.
Even though Signet may not retain its global ranking by value sales in calendar year 2013, it now enjoys an extremely developed distribution network in three substantial jewellery markets (the US, Canada and the UK) as its total number of retail outlets exceeded 3,000 in December 2013. This gives Signet a distinct advantage over several brands, such as Bvlgari and Pandora, which are trying to reduce their dependence on third-party retailers.