Online diamond jeweler Blue Nile last week announced the appointment of former Target Chief Digital Officer Jason Goldberger as president and CEO, replacing Harvey Kanter as of June 12. Kanter will remain as chairman “and continue to play an important role in the strategic direction of the company,” according to a company press release.
Goldberger has more than 20 years of executive leadership in merchandising, digital innovation, marketing, and product management at online retailers including Amazon Gilt Groupe, Hayneedle and Target.
- Blue Nile in November was acquired by an investor group that includes Bain Capital Private Equity and Bow Street LLC for about $500 million in cash, or $40.75 per share, an offer a third higher than its share price at the time.
Seattle-based Blue Nile, founded in 1999, has become the largest online seller of engagement rings, wedding rings and fine jewelry, disrupting the space in the traditional way e-commerce merchants often do — by undercutting rivals on price. The retailer has since begun opening physical stores.
Despite its success in the market, the company’s fortunes were falling by last year, with U.S. engagement net sales falling 8.5% to $59.5 million in the third quarter, compared to $65 million for the third quarter in 2015. Q3 international net sales were $20.3 million, compared to $19.9 million for the third quarter in 2015, an increase of 1.8%. Excluding the impact from changes in foreign exchange rates, international net sales in the quarter — its last as a public company — increased 4.2%. While the jeweler attracts consumers on a budget, it has garnered criticism for not showing the actual diamonds people are buying on the website. This gives it a disadvantage against Costco, another seller of diamond jewelry and engagement rings at prices below those found at local jewelers or at upscale jewelers like Tiffany.
Goldberger raised eyebrows last year when he left Target after less then four months as chief digital officer, a newly created role, as the big-box merchandiser shifted focus to what executives said were business fundamentals. Tech has generally been a forte at Target, and its Cartwheel mobile application, which has expanded to include a rewards program, is widely viewed as a success story and will soon be merged with the flagship Target app.
“Jason has the experience and leadership capability to work with the team to continue to transform the consumer experience of purchasing diamonds and fine jewelry online,” David Humphrey, a managing director at Bain Capital Private Equity and a member of Blue Nile's board. “We thank Harvey for his strategic vision and look forward to his continued contributions to the success of the business.”
Going private allows Blue Nile to fashion a turnaround away from the glare of Wall Street. "This is an opportunity to acquire a true disruptor in a fundamentally attractive and growing segment of the diamond industry," Ryan Cotton, a managing director at Bain Capital Private Equity, said in a statement last fall. "[W]e believe the company will continue to grow as educated consumers continue to seek easy and convenient shopping experiences that deliver transparent pricing and enhanced value."
Last week, the Nordstrom family, which owns a controlling stake in the Seattle-based department store retailer and whose family members remain in its executive ranks, announced that it too may take the company private, a move that analysts told Retail Dive would allow three to five years of thoughtful turnaround without pressure from public investors.