Redeemable preferred shares

12 Months Ended

Feb. 01, 2025

Temporary Equity Disclosure [Abstract]

On October 5, 2016, the Company issued 625,000 redeemable Series A Convertible Preference Shares (the “Preferred Shares”) to Green Equity Investors VI, L.P. Green Equity Investors Side VI, L.P., LGP Associates VI-A LLC and LGP Associates VI-B LLC, all affiliates of Leonard Green & Partners, L.P., (together, the “Preferred Holders”), for an aggregate purchase price of $625.0 million, or $1,000 per share (the “Stated Value”) pursuant to the investment agreement dated August 24, 2016. The Preferred Shares were classified as temporary equity within the consolidated balance sheets.

On March 30, 2024, the Board approved amendments to the Certificate of Designation effective as of April 1, 2024, including to provide for net share settlement upon conversion of the Preferred Shares. Under the terms of the net share settlement, upon a conversion at the option of a Preferred Holder, in exchange for each Preferred Share, Signet was required to deliver cash for the stated value of the Preferred Shares and could elect to deliver any net settlement amount in excess of stated value in cash, shares or a combination of cash and shares. The stated value of the Preferred Shares as of the date of the amendment was $1,050.94 per share. The amended Certificate of Designation also included certain restrictions on the Preferred Holders’ rights to convert the Preferred Shares prior to November 15, 2024. No other modifications to the terms of the Certificate of Designation were made.

On April 1, 2024, following the effectiveness of the amended Certificate of Designation, the Preferred Holders delivered notice to the Company of a conversion of 312,500 Preferred Shares (in the aggregate). In accordance with the terms of the amended Certificate of Designation, the conversion was settled in cash by the Company for $414.1 million on April 15, 2024, which included $2.1 million of accrued and unpaid dividends as of the date of conversion. The excess of the settlement amount (excluding dividends) over the stated value of the Preferred Shares was $83.6 million, which was recorded as a deemed dividend and a charge to net (loss) income attributable to common shareholders in the consolidated statement of operations. The Company also incurred $1.6 million of expenses directly related to the redemption and recorded this as an additional deemed dividend charged to net (loss) income attributable to common shareholders.

During the second and third quarters of Fiscal 2025, the Preferred Holders elected to convert the additional 312,500 Preferred Shares, with the final conversion occurring on October 8, 2024. Upon notice of conversions, the Company elected to settle each of the full conversion amounts in cash totaling $401.5 million. The excess of the aggregate settlement amounts over the stated value of the converted Preferred Shares was $71.8 million and was recorded as a direct reduction to additional paid-in capital in the consolidated balance sheet. Upon the final conversion, the Company has satisfied all requirements under the Certificate of Designation.

The following table presents certain conversion measures as of February 3, 2024:


(in millions, except conversion rate and conversion price)	February 3, 2024
Conversion rate	12.5406
Conversion price	$	79.7410
Potential impact of Preferred Shares if-converted to common shares	8.2
Liquidation preference (1)	$	665.1

(1) Includes the Stated Value of the Preferred Shares plus any declared but unpaid dividends.

In connection with the issuance of the Preferred Shares, the Company incurred direct and incremental expenses of $13.7 million, including financial advisory fees, closing costs, legal expenses and other offering-related expenses. These direct and incremental expenses originally reduced the carrying value of the Preferred Shares, and were accreted through retained earnings as a deemed dividend from the date of issuance through the then first possible known redemption date in November 2024. Accumulated accretion recorded in the consolidated balance sheets as of February 3, 2024 was $12.4 million. Upon final conversion, all direct and incremental expenses have been fully accreted.