A securities class action lawsuit has been filed against the jewelry company Signet Jewelers, which controls a number of the best-known brands in its industry. For more information, visit Battea’s Signet Jewelers case summary.
The suit specifically alleges that Signet made false or misleading statements about its operations and failed to disclose a number of potential issues. These include revelations that employees at one of its brands routinely swapped out customers’ stones for less valuable substitutes, that consumers were becoming less confident in the company’s brand, that pressure from competitors was on the rise, and that all these issues had a negative impact on Signet’s bottom line. When revelations about the company’s business practices were made earlier this year, its stock price took a major hit. The suit has a class period from January 7 to June 3, 2016.
Signet’s subsidiary brands allegedly mishandled customers’ jewelry.Details of the allegations
Earlier this year, a small number of women came forward to say that they had taken rings to Kay Jewelers, one of the brands controlled by Signet, to get them assessed or repaired, but that when they got the rings back, the stones in them had been swapped out for less valuable gems, or that their stones went missing or were damaged during the repair process, according to a pair of reports from Buzzfeed. These instances allegedly happened over a number of years at Kay locations. When stones go missing, they can often be identified by certification numbers inscribed, and are often tracked down in short order.
For its part, the company’s representatives argue that while these incidents sometimes occur, they are rare, the report said. Further, they added that when such issues arise the company does all in its power to set things right.
Shortly after the allegations were published on Buzzfeed, Signet issued statements from top executives reassuring customers about the company’s practices.
“The trust of our customers is not something we take lightly. It has been an honor to help our customers celebrate life and express love through our high quality jewelry for almost 100 years, and dedication to superior customer service and quality control is integral to who we are and how we conduct business,” said Mark Light, chief executive officer of Signet Jewelers. “Our guests are our most precious commodity, and we are committed to maintaining their trust.”
More difficulties
Shortly after those allegations arose in May, Signet was hit with more bad news, according to Business Insider. One credit company examined the way in which Signet handles credit for its customers, and found some issues with how it tracks instances of delinquency on the credit it provides to those buying rings. Specifically, the company would allow people to pay as little as 75 percent of their expected payment and still mark them as up-to-date on their loans.
The impact on stock prices
In the immediate wake of these issues, Signet’s stock value took a major hit. Toward the end of May, the company was trading at more than $108 per share. But by June 1, it was down to less than $99 and falling. By the start of July, the stock was trading at slightly more than $84 per share, and despite a few upticks later in the summer, has continued to trade at a low level more or less ever since. Today, the stock is trading at a little more than $81 per share. At the start of 2016, its price was regularly holding above $120, with a year-to-date high of more than $133 per share observed in early January.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or info@battea.com.