One of Signet’s Largest Shareholders Calls for Company’s Sale

By Rob Bates | March 03, 2025

Select Equity, one of Signet Jewelers’ largest investors, said in a public filing last week that the jewelry giant is underperforming and should be put up for sale.

The asset management firm, which owns close to 10% of Signet’s shares, argued that Signet “would be better able to realize value for stockholders by exploring strategic options for the business, including its immediate sale.”

Like many communications from activist investors, Select’s filing contained a grab bag of complaints that didn’t always add up to a coherent narrative.

In a letter to Signet’s board that accompanied the filing, Select said it was “supportive of the changes the prior CEO, Gina Drosos, made to refresh the brands and capitalize on Signet’s competitive strengths but we have been disappointed with recent performance including operational missteps and management changes.… Despite [strong cash flow], the public market’s perception of and confidence in Signet’s future prospects are clearly poor given [its] enterprise value today of approximately $2 billion.”

The letter rattled off several areas where Select felt Signet had fallen short. “The business has suffered same-store sales declines in each of the last 11 quarters, well below the industry overall, an extraordinary run given Signet’s inherent franchise advantages,” it said. “Operating profit has declined in each of the last three years and fallen short of guidance in each of the last two years.

“Management further hurt organic and online sales by botching the transition of James Allen and the recently acquired Blue Nile business onto a new technology platform just prior to the 2023 holiday selling season, which caused sales of those subsidiaries to drop by significant double-digit amounts for six consecutive quarters.”

Select added that “management and the board have a poor record of capital allocation, wasting nearly half a billion dollars in purchasing unprofitable businesses, including Blue Nile, as well as deploying cash in purchasing shares well above their current level.”

Although nearly all those events happened during Drosos’ tenure, Select seemed to argue that the former CEO had been shunted aside unceremoniously.

Drosos “departed with little warning,” its letter said. “The board communicated that Ms. Drosos would stay through the holiday season as a consultant to guarantee continuity; however, she was notably absent from any calls, investor meetings, and public appearances, while the business badly missed its holiday guidance and continued to flounder.”

(Drosos’ last day as CEO was Nov. 4, and her resignation announcement indicated she’d stay on as an adviser through Feb. 2, but she did not appear on Signet’s Dec. 5 earnings call.)

Select also complained that the board, which has traditionally played a significant role in governing Signet, awarded large bonuses to several top executives to stay on for a “surprisingly short period of time (three to six months).” In addition, it took issue with the salary and bonuses offered to new CEO J.K. Symancyk, who had “no jewelry or fashion experience and a mixed track record,” according to Select’s letter. (To be fair, Drosos had no jewelry or fashion experience, other than serving on Signet’s board, when she took over as CEO.)

The Signet board had not filed a public response by press time, but a company spokesperson tells JCK: “Signet’s board of directors and management team are committed to serving the best interests of the company and our shareholders with a focus on enhancing value. We appreciate communications with our shareholders, value their ideas, and equally see potential and opportunity to create further value in our business.

“As we shared in January, we are actively reshaping our customer-facing strategies in marketing, product design, and assortment innovation to build on our industry-leading position in bridal while accelerating performance and our reach into the larger fashion categories.”

On its December earnings call, Signet chief financial and operating officer Joan Hilson said Symancyk would unveil the company’s new strategy in March 2025.

If Select hoped to goose Signet’s stock, it succeeded. The company’s shares rose 12.4% immediately after the filing (but later fell). Select did not respond to requests for comment from JCK by press time.

(Photo: Getty Images)