(Bloomberg) -- Signet Jewelers Ltd., the company behind the Kay, Zales and Jared jewelry chains, will review its policies after allegations of sexual harassment and gender discrimination roiled the retailer and sent its stock plunging last week.
The retailer is forming a new board committee that will include all its female directors and will be chaired by a woman. It will also appoint an independent consultant to conduct a thorough examination of current policies and set future practices, including procedures for avoiding harassment and retaliation.
The move follows explosive allegations about Signet’s corporate culture that surfaced in a Washington Post story in late February. The assertions stem from a complaint filed in 2008, but hundreds of pages of documents weren’t made public until last month.
About 250 former employees of Signet’s Sterling Jewelers unit gave statements as part of the complaint, depicting a company with unequal pay and raucous parties where employees were harassed. In February 2015, an arbitrator certified a class of about 69,000 current and former female employees in the case, allowing them to proceed in arbitration with the claims.
Among the documents released last month was an amended 2008 complaint alleging that Chief Executive Officer Mark Light and other executives had sex with female employees. Light, then head of the Sterling division, was observed being entertained by female managers “in various states of undress” in a swimming pool, according to the document.
Even as he pledged to review the company’s policies, Chairman Todd Stitzer fired back at the accusations on Thursday, saying the depiction of the company in the complaint was a “parallel universe represented by others.” The sexual-harassment allegations in the arbitration case have no merit, he said.
“The portrait of Signet painted in recent media reports is irreconcilable to me with a company that I served as a director and a chairman for more than five years,” he said. “We have taken seriously the allegations of sexual harassment prepared in connection with the pending arbitration matter, many of which go back decades. The allegations of sexual harassment focused on our leadership were denied under oath.”
Most of Signet’s management staff are female, and the company has been promoting women across the company, he said. The Akron, Ohio-based jeweler also is adding an independent ombudsperson office to provide confidential advice to employees who have concerns about the workplace.
Stitzer said that Light was promoted twice after the company reviewed the allegations in the case. Since then, the executive has guided the company toward consistent growth and outperformed the broader industry, Stitzer said.
Joe Sellers, a lawyer at Cohen Milstein who is representing plaintiffs in the case, criticized Signet for refusing to acknowledge that the company has tolerated sexual harassment.
The company “is trying to split hairs over the legal definition of sexual harassment rather than acknowledging the widespread mistreatment of its employees is indicative of the problem,” he said in a statement.
The allegations sent the shares down 13 percent on Feb. 28, though they’ve begun to rebound since then. The stock rallied as much as 9.6 percent to $70.61 on Thursday after Signet announced plans to close poor-performing stores and possibly outsource its credit business.
The sexual-harassment allegations followed claims last year that Signet stores systematically replaced customers’ diamonds with lower-quality gems. Stitzer said those accusations are “categorically false.”
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