Zales, Jared’s, and Kay to close 170 stores amid slow sales and fake diamond scandal
Signet Jewelers Limited, the world’s largest retailer of diamond jewelry, announced plans to close between 165 and 170 stores by early 2018. Signet is the parent company to Zales, Kay Jewelers, and Jared the Galleria of Jewelry. The stores set to close are those considered to be underperforming, and will mostly be mall-based regional brands.
Many of Signet’s chains are traditionally located within malls, and they are feeling the slowdown in foot traffic. This has resulted in a same stores sales decline of 4.6% in the fourth quarter, and 1.9% for the fiscal year. Aside from declining sales, the company has been battling two major controversies that may have resulted in a change in customer opinion.
In 2016 several customers complained that after they had taken their diamond jewelry to Kay Jewelers, the rare stones were replaced with cheap imitations. Chrissy Clarius, a Kay Jewelers customer, said she would bring her $4,300 engagement ring to Kay’s every six months to get it inspected, as this was part of the company’s gemstone guarantee that insures the stone will “last forever.” After taking the ring in February of 2016 for its six-month checkup, she said the Kay employee couldn’t find the certification number on the diamond. Suspicious, she took the ring to another jeweler, who tested the stone and declared that it was moissanite, which is a cheaper stone. Kay allegedly tested the stone and claimed that it was a diamond, but Chrissy was not convinced. She filed a police report and a complaint with the Better Business Bureau, and the attorney general’s office. After hearing her story, several more women came forward and claimed to have had similar problems with Kay.
Besides the allegations of cheating customers out of quality jewelry, Signet Jewelers is also dealing with a large sexual harassment lawsuit stating the company fostered a culture of sexual harassment and discrimination. A case starting with 15 women in 2008 has since grown into a 69,000 class-action suit, with sworn statements released this week. The allegations include discrimination in pay and promotional practices, as well as sexual harassment in the workplace which was prevalent throughout the late 1990s and 2000s. CEO Mark Light is one of the executives named in the filings for allegedly promoting female employees if they responded positively to sexual advances. Signet has dismissed the claims as “distorted and inaccurate.”