Signet Jewelers on Tuesday announced the acquisition of Rocksbox, a jewelry rental subscription platform, for an undisclosed amount.
Rocksbox is an online retail and rental service, as subscribers can return merchandise after a time, with shipping free both ways, or opt to buy it.
The move expands Signet beyond its largely mall-based fleet of 2,800 stores, which operate under the banners Kay Jewelers, Zales, Jared, H.Samuel, Ernest Jones, Peoples, Piercing Pagoda and James Allen.
Signet Jewelers appeared to benefit from the extra cash many consumers had toward the end of last year, after some infusion of stimulus and months of spending much less on on things like entertainment and clothes.
In the fourth quarter, the company's total sales rose 1.5% year over year to $2.2 billion, as comparable sales rose 7%. Brick-and-mortar comps in the period were down 4.2%, but e-commerce soared 70.5% and reached 23.4% of sales, according to a company press release.
With more help from the government arriving in recent weeks, Signet anticipates continued strength for a while. But the company also notified investors last month that the second half of this year could be tougher, anticipating that as more people are vaccinated against COVID-19, spending could shift away from goods and back to services again. Wells Fargo analysts, in a note following that report, also warned of "lingering longer-term structural issues."
It's not clear whether Rocksbox, founded in 2012 by a former business consultant, is profitable. But Signet's purchase of the startup does address two of three weaknesses detailed by Wells Fargo — that it's "a large mall-based store base" and faces competition that includes online pure players. Signet is also hampered by "a business highly tied to extending credit (including subprime borrowers)," according to Wells Fargo's report.
Rocksbox CEO and founder Meaghan Rose will remain with the company, according to the press release. The acquisition is part of the retailer's recently announced "Inspiring Brilliance growth strategy," which entails boosting e-commerce, expanding its existing services (including repair, warranty services and piercings) and introducing new services. Last year the company announced the closure of nearly 400 stores.