Akron, Ohio-based Signet Jewelers, the parent company of such branded jewelry chain stores as Kay Jewelers, Jared Jeweler, and Zale’s, and the largest retailer of diamond jewelry, is offering voluntary buy-outs to approximately 3,490 corporate store support employees, 2,600 employees in Fairlawn, Ohio and 890 employees in Dallas, Texas, prior to mandatory layoffs.
The decision is being driven by the company’s “Path to Brilliance” restructuring program.
According to a company spokesperson, “What we've announced today is a voluntary transition program that will allow eligible team members to go ahead and make an application to leave the company with certain benefits.
Also curtailed are merit bonuses in both locations. Store personnel are not eligible to participate in the program.
CEO Virginia C. Drosos noted in a memo to employees, “We have critical efforts going on in real estate to reduce rents, merchandise to reduce cost of goods, indirect spending savings, and many more. But we also need to make some hard decisions to get Signet where we need to be. We are hopeful that we can achieve the cost savings we need in this voluntary way, but we may need to make further headcount reductions to free needed funding for investments. I hope you can understand this action was taken to prioritize our people and minimize the savings needed through headcount reductions where possible.”
“We are hopeful that we can achieve the cost savings we need in this voluntary way, but we may need to make further headcount reductions to free needed to fund critical investments in our Path to Brilliance transformation plan and drive sustained growth.” Store employees are not eligible for the buy-out program.”
There is little doubt that the company is suffering the effects from sexual harassment claims involving the previous CEO and key executives, a weak 2018 holiday season, and declining share prices.
“In announcing holiday sales, Drosos commented, "Our holiday season performance fell short of our expectations. Early improvements in refreshed merchandise assortment, digital marketing and OmniChannel were more than offset by larger than expected declines in legacy product lines. In addition, the competitive promotional environment we saw early in the season intensified in December and, despite our increased promotional investments, we experienced reduced traffic during key December gifting weeks. Combined with higher than expected credit costs, these factors negatively impacted our profitability."
“These holiday results reinforce the need to take even faster action to improve our financial and operational performance. We will move decisively to improve profitability through aggressively optimizing our cost structure and continuing to right-size our store base, as well as more effectively managing our inventory. As we enter the second year of our Path to Brilliance transformation, we expect to accelerate initiatives to enhance our product assortment, marketing personalization and analytics, promotional effectiveness, service offerings, and e-commerce to deliver a more seamless and engaging OmniChannel customer experience.”
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