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Update: Signet Jewelers faces class-action lawsuit over alleged false statements


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Update: Signet Jewelers faces class-action lawsuit over alleged false statements

Jewelry and accessories retailer Signet Jewelers Ltd. is facing a class-action lawsuit on behalf of investors who purchased Signet shares between Aug. 24 and Nov. 21, according to a suit filed Dec. 15 at the U.S. District Court in the Southern District of New York.

Plaintiffs, represented by Nebil Aydin, claim that during the nearly three month period, Signet made "false and/or misleading statements" and failed to disclose facts about business and operations. Specifically, the suit states that the jeweler company did not disclose that the company's efforts to convert IT systems that were negatively impacting sales as well as in-store changes to a new credit program.

Signet, whose brands include Kay Jewelers, Zales and Jared The Galleria of Jewelry among others, declined to comment on the suit.

The suit alleges that Signet did not release information about the credit program and IT problems until Nov. 21, when the company said its third-quarter same-store sales were down 5% and Signet CEO Virginia Droso spoke during a conference call. During the call, Droso said Signet saw "disruptions in our systems and processes during our credit outsourcing transition...[that] impacted our comp sales by 60 basis points", according to the suit. That same day, Signet shares dropped $23.05 or 30% to close at $52.79.

The investors claim they have "suffered significant losses and damages" as a result, the suit states.

Law firm Bronstein Gewirtz & Grossman LLC issued a notification to investors about the lawsuit on Dec. 18.

The jeweler on Nov. 21 narrowed its guidance for profit for fiscal 2018 after reporting a drop in same-store sales in the third quarter due to a series of hurricanes in the U.S. and disruption from the outsourcing of its credit portfolio.

This article was amended Dec. 20 at 6:08pm EST to include Signet's no comment, further details on the lawsuit and clarify Bronstein Gewirtz & Grossman LLC's role in the lawsuit.