Robbins Arroyo LLP: Signet Jewelers Limited (SIG) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Signet Jewelers Limited (NYSE: SIG) in the U.S. District Court for the Southern District of New York. The complaint is brought on behalf of all purchasers of Signet securities between January 7, 2016 and June 3, 2016, for alleged violations of the Securities Exchange Act of 1934 by Signet’s officers and directors. Signet engages in the retail sale of diamond jewelry and watches in the United States, Canada, Puerto Rico, the United Kingdom, the Republic of Ireland, and the Channel Islands. Signet operates stores through well-known brand names such as “Kay,” “Jared,” “Zales,” and “Peoples Jewellers.”
Signet Accused of Hiding Its Diamond Swapping Scheme From Investors
According to the complaint, throughout the class period, Signet touted the company’s positive financial condition in press releases and filings with the U.S. Securities and Exchange Commission. Signet highlighted the company’s significant same store sales increases and “strong top and bottom line growth with results driven by product innovation; targeted marketing; and supported by delivering superior customer service by the best store teams in retail.” Signet also portrayed confident projections for the company, stating, “We remain committed to maintaining profitable growth while balancing investment back into the business with shareholder return.” Then, on May 25, 2016, BuzzFeed News reported on the widespread occurrences of diamond swapping in connection with Signet’s Kay stores, including details from several Kay customers whose diamonds were exchanged for less expensive stones while the customers’ jewelry was in the custody of Kay, typically for repair.
The complaint alleges that Signet officials failed to disclose that: (1) the company was experiencing difficulty ensuring the safety of customers’ jewelry while in the custody of Signet’s brands; (2) employees at stores under at least one of Signet’s brands were swapping customers’ stones for less valuable stones; (3) the company was experiencing a drop-off in customer confidence; (4) the company was facing increasing competitive pressures; and (5) as a result, the company’s financial performance was being negatively affected. On May 26, 2016, Signet revealed that its same store sales for the period increased by only 2.4%, falling below the company’s previously issued first quarter 2017 guidance of 3% to 4%, and that it was lowering its fiscal year 2017 same store sales growth guidance from 3.0% to 4.5% down to 2.0% to 3.5%. On June 3, 2016, Signet issued a press release in which it acknowledged the recent allegations of instances of diamond swapping, stating that incidents of misconduct are “dealt with swiftly and appropriately.” On this news, Signet stock fell $4.04 per share, or 4.3%, to close at $88.19 per share on June 3, 2016.
Signet Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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