Even though it’s a generally successful company, Signet has historically had tension between its board and its management. The 1990s-era directors famously didn’t get along with Nate Light, one of the architects of present-day Sterling. That tradition seemingly carries on today. There have now been three CEOs since Terry Burman left in 2011, and the last two seemed to leave abruptly.
Now, with board member Virginia “Gina” Drosos installed as company head, replacing another Sterling architect, Mark Light, the message is clear: The directors are in control.
One knowledgeable source complains that the current board “have been managing from the boardroom,” blaming the board for some of the recent defections in upper management. Another gripes that the directors do not appreciate what current management has accomplished, generating $763 million in operating income in fiscal 2017 during an unfavorable retail environment.
Yet, given the string of negative news, it’s probably not surprising that Light stepped down. While his health issues are real—and apparently prevented him from attending this year’s JCK Las Vegas show—this move has been long-rumored. During Signet’s March conference call, board chairman Todd Spitzer publicly announced that Light’s job was not in jeopardy. That’s generally a good sign that it is.
The new CEO, Drosos, is an accomplished executive with a wide range of experience: She’s headed both a biotech company and division of Proctor and Gamble responsible for $6 billion in annual sales, about as much as Signet. She’s also the company’s first female CEO, which makes a statement given its problems with gender issues. That said, with no jewelry or retail experience, she is not necessarily the first person you’d consider for that post. She clearly has a strong marketing background, and her announcement indicated she plans to upgrade Signet’s digital capabilities. But one point might get some a little nervous: She sold the last company she headed.
Unlike Mike Barnes, Drosos doesn’t come in with a fine-tuned machine beneath her. The company is still trying to integrate Zales three years after its purchase. And while Signet still has plenty of experienced people in its ranks, its C-suite has been decimated. With Light leaving, chief retail insights and strategy officer George Murray is considered the only old-time top executive still there. (Current president Seb Hobbes has been at Signet for six years, but mostly in the United Kingdom.) Clearly, there is a lot of rebuilding to do.
“There is no longer much understanding of the jewelry business left,” one source told me. “One thing is for sure: Things are going to change.”