Shares of national jewelry retailer Signet Jewelers Ltd. plunged Tuesday following a story by the Washington Post about allegations of widespread sexual harassment at the company.
Shares of Signet, which has its corporate offices in Akron and employs thousands in the area, fell $9.29, or 12.8 percent, to close at $63.59. Trading was briefly halted in the afternoon pending an announcement from Signet regarding the Post story. Signet’s stock price has dropped by more than half since its 2015 high of nearly $151 a share.
The sexual harassment allegations grew out of a March 2008 gender discrimination arbitration initially filed against Signet’s Sterling Jewelers by more than a dozen women. The arbitration evolved into the ongoing gender discrimination class action case and involves allegations of discrimination in pay and promotions.
Signet’s Sterling Jewelers issued a statement Tuesday regarding the Post’s story, which was first published online Monday evening. A Signet spokesman called the report “patently misleading” and said the company was asking the newspaper to make corrections.
The company statement said that none of the class members — the total has subsequently swelled to include about 69,000 former and current employees — in the class action lawsuit have brought legal claims “for sexual harassment or sexual impropriety.”
Sterling said the sexual harassment allegations involve a “very small number of individuals in a workforce of more than 84,000 [during the period covered by the gender-discrimination class action lawsuit], and many allegations go back decades.”
Signet’s Sterling Jewelers division has about 1,500 stores in the United States, including Kay Jewelers, Jared the Galleria of Jewelry, and others. Signet’s Zales division has more than 900 stores in the United States. Signet also has numerous stores in the United Kingdom.
Assault allegations
According to the Post, hundreds of former employees of Signet’s Sterling Jewelers said female workers were routinely groped, demeaned and urged to sexually cater to bosses to keep their jobs. The Post story says Mark Light, now Signet’s chief executive, is named in one 2013 document as being among male employees accused of inappropriate behavior.
The allegations from about 250 women and men arose in a private arbitration related to the 2008 case. Documents related to the arbitration were publicly released Sunday after names in the documents were redacted. The Post story notes that in a practice common in the United States, Sterling employees are required to use private arbitration instead of public courts to resolve employment complaints.
One of the allegations in a report tied to the case says a female employee was raped by a supervisor in 2001 or 2002 following a night of drinking tied to a sales celebration; the incident was not reported to police.
Business Insider, a news website, last September reported that some sexual harassment claims involving Sterling Jewelers had surfaced in claimants’ motion for a class action and arbitration documents.
Those allegations, expanded upon in the Post story, are the latest in a string of struggles for Signet.
Sales for the all-important 2016 holiday season were disappointing. In its January earnings call, the company said its newly revamped e-commerce platform couldn’t handle holiday online traffic.
Also last year, there were allegations of gem-swapping by some customers at stores outside of Ohio. The customers claimed that diamonds they had brought in for cleaning were swapped for other stones. The company has said the allegations were “misleading” and grossly amplified on social media.
Additionally, some investors last year expressed concerns about Signet’s credit business that customers use to finance jewelry purchases. Northcoast Research said earlier this year that the company was considering a sale of the business.
Last year, Signet, which bills itself as the world’s largest retailer of diamond jewelry, said in an annual report that it could face “substantial damages” if it loses the class action case.
About 3,000 people in Summit County work for Signet, including at its retail stores, making it one of the area’s largest employers.
Sterling statement
Sterling said Tuesday that the company takes any sexual harassment concerns “seriously and had — and continues to have — multiple processes in place to receive and investigate allegations of misconduct.”
Concerning the allegations of pay and promotions discrimination in the case, Sterling said, “We have thoroughly investigated the allegations and have concluded they are not substantiated by the facts and certainly do not reflect our culture.”
Sterling noted that “as a result of our employment and advancement programs, as well as our culture, more than 68 percent of all our store management staff are female, and female participation in management positions continues to grow.”
Sterling’s statement said that despite years of litigation, millions of pages of documentation, and numerous depositions, “claimant’s counsel have chosen not to proceed with sexual harassment claims. These allegations are being publicized by claimant’s counsel to present a distorted, negative image of the company.”
Joseph Sellers, a partner in the Washington, D.C., law office of Cohen Milstein Sellers & Toll, and lead counsel representing the complainants in the class action lawsuit, also issued a statement Tuesday.
“These documents suggest a culture that allowed and even encouraged sexual discrimination at every level,” Sellers said. “The circumstances described by current and former employees are terribly demeaning to women, not just because they were mistreated but because they saw their co-workers treated as sexual objects, too. This conduct is consistent with the evidence in this case that women were systematically paid less than men, even while performing more highly than men, and received fewer promotions that they should have.”
The class action discrimination case may go to trial later this year.
The full Washington Post story can be read at www.washingtonpost.com. Lawsuit documents, including redacted statements, can be found at the Cohen Milstein website, www.cohenmilstein.com/case-study/sterling-jewelers