Six Takeaways From Yesterday’s Signet Conference Call
The company is taking new steps on sexual harassment, keeping senior management, and struggling in malls
Some notable points from Signet’s conference call yesterday, based on a Seeking Alpha transcript.
– Signet has fully embraced omnichannel. Its newly appointed president and chief customer officer, Sebastian Hobbs, has been tasked with improving Signet’s online offerings and getting them in sync with its offline presentation.
– Signet was long considered an outlier in that it hasn’t been impacted by the larger retail environment. Now it regularly points to retail’s larger woes, particularly the ongoing problems at malls. CEO Mark Light noted that its mall stores underperformed its others—a possible sign it’s turning away from shopping centers, its longtime base.
– Sales of Ever Us jewelry—Signet’s proprietary brand—have more than doubled year over year, Light said. Vera Wang line extensions are also doing well, according to Light.
– The call began with an unusual appearance by Signet’s chairman, H. Todd Stitzer, who laid out the company’s position on sexual harassment, in the wake of a series of damaging headlines. His Signet-issued statement can be seen here. The steps he’s taken—a board investigation, appointment of a consultant to review the company’s policies, and establishment of a new independent ombudsman—seem both sensible and probably overdue.
– Stitzer also offered—unprompted—a defense of senior management, particularly CEO Mark Light, whose name has surfaced in recent articles. Here is his statement:
[A] number of you have asked me about management’s fitness for purpose.
I’ve also been asked whether information regarding the lawsuit was taken into account when Mark was appointed CEO.… When evaluating whether to make Mark chief operating officer in 2014, we, obviously, reviewed his business performance and evaluated, with advice from counsel, the allegations that were described in connection with the case, reviewed the available information, the time frames involved, and the context in which it was offered. Based on our review and evaluation, we appointed Mark as COO. When the previous CEO departed the company, we conducted a further confirmatory review, and Mark was appointed CEO.
Over the past decade, particularly since 2009, our management team under Mark’s leadership has guided quarter-to-quarter and year-on-year growth that has been consistent and high quality. As you’ll hear from Mark himself, benchmarked against others in the jewelry industry and the retail industry generally, our results have outpaced the pack.
– He also called the company’s 2014 acquisition of Zale—which this blog has questioned—a success:
This major strategic move required executive leadership with highly refined industry understanding to integrate and define synergies to unlock the kind of benefits we’re now seeing. We are confident we will deliver an incremental $70 million of synergies by the end of fiscal 2018, which means we will have delivered $250 million of cumulative synergies from this value-creating transaction. This stands in stark contrast to the results achieved in most acquisitions.