Signet Jewelers has a new chief executive officer with a penchant for acquisition-led growth who looks likely to deploy that strategy again.
Virginia Drosos is only five weeks into her tenure as Signet’s first female ceo. She was tapped in July to lead the company amid extensive sexual harassment allegations made as part of ongoing arbitration regarding gender discrimination, as well as flat sales and stock declines.
But Drosos looks to be much more than a token of gender equality. She has decades of executive experience in the consumer products space, most notably 25 years at Procter & Gamble, where she led its global beauty group and oversaw a slew of acquisitions, including Clairol, Wella, Gillette, DDF and Frédéric Fekkai.
She ended up creating a group of 20 brands at P&G doing $6 billion in business. She left the company after it shifted the base of its beauty operations to Singapore in 2012, soon becoming ceo of Assurex Health and joining Signet’s board of directors.
During Goldman Sachs’ retail conference on Wednesday, Drosos admitted that her focus at P&G was acquisitions to support “deep consumer understanding and global expansion,” along with innovations and cross-channel shopping, and she looks poised to continue that at Signet.
During a separate meeting with analysts at the conference, Drosos alluded to getting the jewelry retailer out of its “formulaic approach,” with a new focus on e-commerce and maybe nabbing new, more tech-savvy companies, according to a note from Brian Tunick, an RBC Capital Markets analyst.
“Although management highlights that it is currently very happy with the talent within the organization and the market reach of its banners, we believe management will maintain an ‘open-minded approach’ to potential future acquisitions, particularly to enhance its IT-related capabilities (where it may make more sense to acquire than do in-house) as well market reach (in areas it is less penetrated, including fashion and high-end),” Tunick said.
There has been a flurry of merger and acquisition activity in the jewelry front this year. K&M Accessories in June bought costume jewelry brand Robert Rose and Movado in July made its first acquisition in Olivia Burton.
Since Drosos has been at the helm, Signet has already struck a $328 million deal to acquire jamesallen.com, a web site focused on design-it-yourself diamond jewelry aimed at a younger demographic. It’s a far cry from Signet’s last acquisition in 2014 of mall-based jeweler Zales.
“In my career, I’ve spent a lot of time understanding consumers and changing category dynamics as a result of changing consumer needs and we find ourselves at exactly that juncture in the retail industry today and definitely in the jewelry industry,” Drosos said Wednesday at the conference.
For the second quarter, Signet was already showing small signs of improvement, with total sales up 1.9 percent to $1.4 billion and same-store sales up 1.4 percent, driven mainly by an increase in online sales.
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