Signet and James Allen rank as the fourth- and fifth-largest jewelers for online sales in the Top 500.

Two Top 500 jewelers are banding together to improve their standing in an industry that is struggling with flat sales.

Signet Jewelers Ltd. said Thursday that it acquired the parent company of fast-growing competitor JamesAllen.com for $328 million in cash.

Signet, No. 113 in the Internet Retailer 2017 Top 500, made the announcement of its acquisition of JamesAllen.com (No. 140) parent R2Net in conjunction with its fiscal second quarter 2018 earnings filing.

The deal brings together the fourth- and fifth-largest jewelers in the 2017 Top 500, which generated a combined total of $651.1 million in online sales in 2016, according to Top500Guide.com data. The Top 500 ranks online retailers by their North American web sales.

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James Allen is growing much faster online than Signet; it had an Internet Retailer-estimated $288 million in online sales last year, up 50% from $192 million in 2015. Online sales at Signet, however, inched up just 1.0% year over year. Signet owns the Kay, Jared and Zales jewelry brands as well as the Sterling Jewelers online store.

Signet CEO Virginia Drosos acknowledged that James Allen’s digital prowess is what made the retailer an attractive acquisition target. “The acquisition will enhance our innovation and digital capabilities with R2Net’s technology to create a best-in-class omnichannel shopping experience across our banners,” she said as part of the jewelry retailer’s earnings release.

The deal is expected to close later this year. The James Allen brand will be retained, along with its executive team, Signet said.

The acquisition comes just four months after James Allen raised $140 million in funding from private equity firm Francisco Partners. At the time, R2Net CEO and co-founder Oded Edelman said funding would be used to invest in technology innovations.

Top500Guide.com data shows that both Signet and James Allen’s customers are largely women (68.1% for Signet, compared with 60.3% for James Allen). When it comes to household income, of the five income brackets Internet Retailer measures, the under $30,000 segment is the biggest for each retailer: 31.55% for Signet and 32.75% for James Allen. The dominant age group for each retailer is the 25-34 year-old range.

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In its earnings release for fiscal Q2 2018 ended July 29, Signet reported online sales of $82.2 million, up 18.1% from $69.6 million during the same time last year. Total sales grew to $1.400 billion during the quarter, up 2.0% from $1.373 billion.

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