Ratner faces competition for jewellery stores

Entrepreneur Gerald Ratner’s interest in buying the Ernest Jones and H Samuel jewellery businesses was under pressure from a familiar quarter today.

As well as Mr Ratner, the UK shops of transatlantic retailer Signet could also appeal to Icelandic investment group Baugur, which agreed last week to acquire department store chain House of Fraser for £351m (€520m).

Baugur chief executive Jon Asgeir Johannesson told the Financial Times that the UK operations would be a good fit for his growing retail portfolio that already includes jewellers Goldsmiths and Mappin & Webb. Other operations in the Baugur portfolio include Whittard of Chelsea and Hamleys.

The outcome of the pair’s interest will depend on the reaction of Signet to a statement at the weekend from private equity companies Apax Partners and Kohlberg Kravis Roberts (KKR). Apax and KKR said they had “no current intention of approaching the board of Signet to make an offer for the company”.

Earlier this month, they were mulling over a £2.3bn (€3.4bn) bid for the whole Signet group, which has 591 shops in the UK as well as 1,221 in the United States.

The Mail on Sunday said Mr Ratner was expected to put in an offer worth around £200m (€296m) for the UK arm of Signet – which was once called Ratners and under his control – in the next few weeks.

He told the newspaper: “We are looking at Ernest Jones as well as H Samuel. It would be ridiculous to break them up.”

Mr Ratner lost control of Ratners after a speech at the Institute of Directors in 1991 when he called one of his products “total crap”.

Mr Johannesson told the FT that while he was very interested in Signet’s UK operations – accounting for around a quarter of its turnover – he would not make a bid for the whole group.

The interest would be in keeping with the Iceland company’s “buy and build” strategy of creating Baugur-backed retail groups that can pool buying power and share logistics and administration.

Further information on the future strategy of Signet could emerge this week as the company is due to post half-year results on Wednesday.

In an update earlier this month, it said second quarter like-for-like sales were up 0.6% in the UK.

Trading has been stronger in the US, meaning profits for the half-year are likely to be between £57.5m (€85.2m) and £59.6m (€88.3m), compared with £52.1m (€77.2m) for the first half last year.