JK's Turnaround Plan for Signet
March 27, 25
Remember Gerald Ratner? He managed to wipe $500m off the value of Ratners Group, the British jewelry company, almost overnight with his frank assessment of the goods it sold.
It was back in 1991 that he made his infamous comments at an Institute of Directors conference in London.
"People say: 'How can you sell this for such a low price?' I say: 'because it's total crap'."
In the same speech he observed that a pair of Ratners' earrings was "cheaper than a prawn sandwich from Marks & Spencer, but I have to say the sandwich will probably last longer than the earrings".
The public relations crisis that followed led to his departure and a radical rebranding of the company in 1993 as Signet Group.
Signet had bought up Ernest Jones, Sterling, Zales, Kay Jewelers, Watches of Switzerland and others, and had around 1,500 stores at the time.
Today Signet is the world's largest retailer of diamond jewelry, and has over 2,600 stores globally. But it's on the back foot again.
This time it's not down to one individual's poor judgment, it's down to a perfect storm of declining sales, underperforming stores, a subdued bridal market (still recovering from COVID), a lack of growth and a failure (highlighted over the last holiday season) to meet consumer demand for lower-priced jewelry.
J.K. (James Kevin) Symancyk, the company's new CEO, announced a turnaround plan last week to address these problems, as Signet reported a 6 per cent drop in quarterly sales (three months ending 1 February 2025) and a 7 per cent fall for the full year (down to $6.7bn).
Grow Brand Love - that's the title of the turnaround plan - aims to create a clearer distinction between brands (or banners), to create emotional bonds and to attract new and loyal consumers.
Signet has an abundance of banners - Kay Jewelers, Zales, Jared, Banter by Piercing Pagoda, Diamonds Direct, Blue Nile, JamesAllen.com, Rocksbox, Peoples Jewellers, H. Samuel, Ernest Jones.
The big three - Kay, Zales and Jared - account for almost three quarters of Signet revenue and have "high consumer awareness and a leading position in the industry". The smaller banners, less so.
J.K. wants to shift the focus from banners to brands, which is quite a nuanced distinction.
"Brands build loyalty with customers through emotional and engaging connections, while banners are transactional, literally a static nameplate on the door," he explained in an earnings call last week.
The fate of the smaller banners remains unclear, although J.K. said it would be evaluating their role and potential.
He also wants to grow Signet's share of the $10bn bridal market in the US. It currently has around 30 per cent, with bridal representing half of all merchandise sold by the company.
But sales are still being impacted by the "engagement gap". COVID wasn't good for romance, with fewer couples meeting and fewer couples deciding to wed.
"We will leverage our in-house design and strategic vendor partners in bridal to bring to market a more timely pipeline of new and trending designs in a range of price points," said J.K. He also wants to increase self-purchasing of everyday jewelry.
And Signet recognizes the growth potential of fashion lab growns. Sales are up 60 per cent in the quarter to date among its big three brands, with attractive margins.
Signet can't make an omelette without breaking eggs. Thirty per cent of its senior leadership team will depart under the plan. Top executives Jamie Singleton (Group President and Chief Consumer Officer), Rebecca Wooters (Chief Digital Officer), Bill Brace (President of Kay), and Bill Luth (Executive VP of Global Store Operations) are soon to leave or have already left.
And the company has identified 150 under-performing stores, mostly in malls, for possible closure. Another 200 could be relocated and 200 will be renovated.
But the response has been positive and Signet's stock surged in the days after Grow Brand Love was unveiled.
J.K. was optimistic, but measured. "We recognize it's been a dynamic time in the diamond industry, one that we have a good track record of navigating," he said.
"In my experience, companies that focus solely on risks or solely on opportunities during times of disruption underperform.
"Companies that aggressively pursue opportunities while considering risk mitigation tactics, I believe, can thrive in dynamic times."
Have a fabulous weekend.