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Crisis of the Week: Signet Confronts Diamond Debacle – June 13, 2016

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Crisis of the Week: Signet Confronts Diamond Debacle – June 13, 2016

Halsey Knapp was quoted in the Wall Street Journal’s ‘Crisis of the Week: Signet Confronts Diamond Debacle’ on June 13, 2016.

This is a weekly commentary by external experts.

The crisis this week involves Signet Jewelers, which is battling allegations employees substituted premium diamonds with cheaper, man-made substitutes. The company’s stock price declined following the reports.

Signet—which owns national jewelry-store brands Jared, Kay Jewelers and Zales—issued a statement strongly refuting the allegations. “Signet Jewelers’ entire team culture is directed toward ensuring that we earn and maintain customer trust,” the company said. “Incidents of misconduct, which are exceedingly rare, are dealt with swiftly and appropriately.”

Using only the statement issued by the company, the experts break down the effectiveness of its communications, highlighting what’s good about its messaging and tone and delivery, and what’s not so good. How should the company proceed?

Halsey Knapp, partner at Krevolin Horst: “Signet’s initial foray misses the mark. It fails to limit the impact of this misconduct to a subclass of Signet purchasers. Only later does Signet square up to face the substance, saying: ‘Incidents of misconduct…are dealt with swiftly and appropriately.’ This response evades the ultimate question:  How did Signet deal swiftly and appropriately with the victims and perpetrators of the alleged diamond swapping?  Objecting to allegations in social media is not denying those allegations.

“Signet offers no meaningful information that suggests the perpetrators were apprehended, and no assurance their actions were confined in some manner. Signet fails to disclose how it compensated or remedied the plight of the innocent victims. And there is only the slightest hint of remorse or apology.”

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