1 00:00:00,320 --> 00:00:03,159 Speaker 1: Charlie. Thank you. From the Bloomberg Newsroom by Mark Crumpton. 2 00:00:03,440 --> 00:00:05,720 Speaker 1: This news update is brought to you by the Jeep 3 00:00:05,760 --> 00:00:09,719 Speaker 1: Grand Cherokee, the most awarded suv ever. The Grand Cherokee 4 00:00:09,760 --> 00:00:13,480 Speaker 1: continues to raise the bar with its luxurious interior and 5 00:00:13,600 --> 00:00:17,360 Speaker 1: legendary four by four capability. Drive one at your local 6 00:00:17,440 --> 00:00:21,520 Speaker 1: jeep dealer. Today, the Associated Press reports Egypt says it 7 00:00:21,640 --> 00:00:24,960 Speaker 1: spotted the wreckage of the egypt airplane that crashed into 8 00:00:25,040 --> 00:00:28,960 Speaker 1: the Mediterranean last month, killing all sixty six people on board. 9 00:00:29,320 --> 00:00:32,920 Speaker 1: The country's investigating Committee said in a statement late today 10 00:00:33,200 --> 00:00:36,400 Speaker 1: that a vessel contracted by the Egyptian government to join 11 00:00:36,440 --> 00:00:39,080 Speaker 1: the search efforts for the data recorders and the wreckage 12 00:00:39,080 --> 00:00:43,120 Speaker 1: of Flight A three Quote had identified several main locations 13 00:00:43,120 --> 00:00:46,320 Speaker 1: of the wreckage. Accordingly, the first images of the wreckage 14 00:00:46,320 --> 00:00:50,519 Speaker 1: were provided to the investigation committee end quote. Campaigning in 15 00:00:50,560 --> 00:00:54,240 Speaker 1: Atlanta today, presidential candidate Donald Trump said he's running as 16 00:00:54,240 --> 00:00:56,920 Speaker 1: a Republican but doesn't really care if he gets an 17 00:00:57,000 --> 00:01:01,240 Speaker 1: endorsement from top GOP leaders. You know, the republic and honestly, folks, 18 00:01:01,640 --> 00:01:04,760 Speaker 1: our leaders, our leaders have to get tougher. This is 19 00:01:04,760 --> 00:01:06,880 Speaker 1: too tough to do it alone. But you know what, 20 00:01:07,000 --> 00:01:09,440 Speaker 1: I think I'm gonna be forced to. I think I'm 21 00:01:09,480 --> 00:01:12,200 Speaker 1: going to be forced to. Meanwhile, Hillary Clinton told the 22 00:01:12,319 --> 00:01:15,959 Speaker 1: Borders in Hampton, Virginia, Donald Trump has no idea how 23 00:01:16,000 --> 00:01:19,560 Speaker 1: to stop terrorism. He has been fixated on the phrase 24 00:01:20,280 --> 00:01:24,040 Speaker 1: and I quote radical Islam as if those are magic 25 00:01:24,120 --> 00:01:28,800 Speaker 1: words that, once uttered, we'll stop terrorists from coming after us. 26 00:01:29,120 --> 00:01:32,280 Speaker 1: Mrs Clinton said, quote. Not one of Donald Trump's reckless 27 00:01:32,360 --> 00:01:35,880 Speaker 1: ideas would have saved a single life in Orlando. Global 28 00:01:35,959 --> 00:01:39,560 Speaker 1: News twenty four hours a day, powered by our journalists 29 00:01:39,560 --> 00:01:42,400 Speaker 1: in more than one hundred fifty news bureaus around the world. 30 00:01:42,640 --> 00:01:45,680 Speaker 1: From the Bloomberg News Room by Mark Crumpton, Charlie and 31 00:01:45,800 --> 00:01:48,840 Speaker 1: another after the Bell Deal to tell you about Envision 32 00:01:48,880 --> 00:01:53,200 Speaker 1: buying am Serge, with the deal enterprise value about fifteen 33 00:01:53,320 --> 00:01:56,440 Speaker 1: billion dollars. I'm Charlie Poddett. That's a Bloomberg business flash. 34 00:01:56,800 --> 00:02:01,120 Speaker 1: Charlie Pillett, thank you so very much. Mark in focus now, 35 00:02:01,160 --> 00:02:03,760 Speaker 1: CEO of Signat Jewelers, parent company to the Cay Jewelers 36 00:02:03,760 --> 00:02:06,880 Speaker 1: and Sales brands, among others, has been under fire recently 37 00:02:06,920 --> 00:02:10,280 Speaker 1: for allegations of the company's substituted premium diamonds with cheaper, 38 00:02:10,400 --> 00:02:13,720 Speaker 1: man made substitutes. He sat down with me earlier today 39 00:02:13,760 --> 00:02:16,840 Speaker 1: to discuss how he's addressing investor concerns and what this 40 00:02:16,919 --> 00:02:21,000 Speaker 1: investigation means to the company. First of all, it means 41 00:02:21,040 --> 00:02:23,360 Speaker 1: everything to us, because we are in the business of trust. 42 00:02:24,000 --> 00:02:27,040 Speaker 1: I've been Signal Jewelers is business for a hundred years, 43 00:02:27,120 --> 00:02:29,000 Speaker 1: and I personally have been working for Signal for over 44 00:02:29,040 --> 00:02:32,040 Speaker 1: thirty years. Is the only place I've worked. And over 45 00:02:32,080 --> 00:02:34,880 Speaker 1: the years, year after year after year, we consistently try 46 00:02:34,919 --> 00:02:38,639 Speaker 1: to understand our customers. We serve our customers, and for years, 47 00:02:38,919 --> 00:02:41,280 Speaker 1: and I'm talking for over thirty years, the most important 48 00:02:41,760 --> 00:02:44,720 Speaker 1: characteristic when our customers looking for a diamond or jewelry, 49 00:02:45,080 --> 00:02:47,840 Speaker 1: it's not assortment, it's not the price, it's trust. So 50 00:02:47,919 --> 00:02:50,440 Speaker 1: everything we do as a jewelry people, we always are 51 00:02:50,480 --> 00:02:52,880 Speaker 1: trying to make certain that we have the trust of 52 00:02:52,880 --> 00:02:56,000 Speaker 1: our customers critical. So once we heard about these these 53 00:02:56,040 --> 00:03:00,200 Speaker 1: alleged um diamonds being changed or missing, we got about 54 00:03:00,200 --> 00:03:02,080 Speaker 1: it immediately. Of course, the first thing we did we 55 00:03:02,080 --> 00:03:03,720 Speaker 1: got in touch with the customers and we tried to 56 00:03:03,800 --> 00:03:06,520 Speaker 1: understand the situation, and we wanted to make it right 57 00:03:06,560 --> 00:03:09,440 Speaker 1: for them first and foremost parallel to that, we immediately 58 00:03:09,480 --> 00:03:12,760 Speaker 1: got involved to understand the process, to make sure that 59 00:03:12,960 --> 00:03:16,000 Speaker 1: the process that we have in place is making sure 60 00:03:16,000 --> 00:03:18,560 Speaker 1: that there were no problems. So as a whole we 61 00:03:18,600 --> 00:03:21,720 Speaker 1: react to everyone as as quickly as we possibly can. 62 00:03:22,120 --> 00:03:24,280 Speaker 1: One thing you need to understand is that as signat 63 00:03:24,320 --> 00:03:28,360 Speaker 1: Jeweler's UM we did last year alone over four million. 64 00:03:29,080 --> 00:03:31,280 Speaker 1: It's called the products that went through our repair and 65 00:03:31,360 --> 00:03:33,760 Speaker 1: service of over four million. And when we looked and 66 00:03:34,120 --> 00:03:36,600 Speaker 1: looked and studied our customer complaints that relates to our 67 00:03:36,600 --> 00:03:39,920 Speaker 1: repeer and service centers, less than two tenths of a 68 00:03:39,960 --> 00:03:43,000 Speaker 1: percent of our customers complained about something to do with 69 00:03:43,560 --> 00:03:46,600 Speaker 1: a repair, missing or or quality issues. I'm talking all 70 00:03:46,640 --> 00:03:48,720 Speaker 1: in less than two tenths percent. And by the way, 71 00:03:48,800 --> 00:03:51,160 Speaker 1: two tenths of percent is too much for us and 72 00:03:51,200 --> 00:03:53,240 Speaker 1: for me, so that we are looking at all our 73 00:03:53,280 --> 00:03:55,720 Speaker 1: process and making sure we get it right for our customers. 74 00:03:55,800 --> 00:03:59,520 Speaker 1: Are you concerned that you have You've done interviews like this, 75 00:03:59,680 --> 00:04:02,000 Speaker 1: You've said you've looked into it, and only a tiny 76 00:04:02,160 --> 00:04:06,600 Speaker 1: fractional percentage first of all our complaints from your customers, 77 00:04:06,600 --> 00:04:08,400 Speaker 1: and even then you're you're not Are you saying that 78 00:04:08,440 --> 00:04:11,360 Speaker 1: you have found no one. There's no one who can 79 00:04:11,440 --> 00:04:14,600 Speaker 1: prove that you have found whose diamond was swapped. As 80 00:04:14,640 --> 00:04:17,839 Speaker 1: of yet, we are investigating any customer in every customer. 81 00:04:17,880 --> 00:04:20,200 Speaker 1: As of yet, we haven't verified it, but we're taking 82 00:04:20,240 --> 00:04:24,280 Speaker 1: every every individual customers seriously and if we find something, 83 00:04:24,600 --> 00:04:26,480 Speaker 1: once we get the diamond and we'll have it checked 84 00:04:26,800 --> 00:04:28,520 Speaker 1: and we make sure if it's not, then we will 85 00:04:28,560 --> 00:04:30,560 Speaker 1: get involved and find a figure out. What where is 86 00:04:30,760 --> 00:04:32,800 Speaker 1: the problem. Are you concerned that your share price has 87 00:04:32,839 --> 00:04:36,480 Speaker 1: fallen so sharply? You recently purchased about what two dollars 88 00:04:36,520 --> 00:04:39,000 Speaker 1: worth of your stock a sign. I'm sure you're trying 89 00:04:39,000 --> 00:04:41,279 Speaker 1: to show the public you believe in the company, but 90 00:04:41,400 --> 00:04:46,760 Speaker 1: investors seem to doubt what you have said and potentially done. 91 00:04:47,560 --> 00:04:50,159 Speaker 1: You have to look at our company over years. We 92 00:04:49,960 --> 00:04:51,960 Speaker 1: are we are a company over the last three years 93 00:04:51,960 --> 00:04:54,480 Speaker 1: have had eight to miss uncompounded annual growth rate. If 94 00:04:54,480 --> 00:04:56,800 Speaker 1: you look back another five years or ten years, we 95 00:04:56,839 --> 00:04:59,680 Speaker 1: have been outpacing the growth of the jeweler industry. We've 96 00:04:59,680 --> 00:05:01,320 Speaker 1: been out for it's in the growth of the of 97 00:05:01,360 --> 00:05:04,720 Speaker 1: the retailer sheet and from a profitable perspective, are we concerned? 98 00:05:04,720 --> 00:05:06,720 Speaker 1: Of course, that's why I'm here today trying to set 99 00:05:06,720 --> 00:05:10,080 Speaker 1: the record straight that we had signa Jewelers are making 100 00:05:10,120 --> 00:05:12,120 Speaker 1: sure that we're doing the right things for our customers. 101 00:05:12,200 --> 00:05:16,680 Speaker 1: Keeping their trust is critical. What about concerns about the 102 00:05:16,720 --> 00:05:22,000 Speaker 1: credit facility that you use to help customers buy jewelry 103 00:05:22,000 --> 00:05:26,200 Speaker 1: from you, especially diamond such an important purchase. Issues raised 104 00:05:26,279 --> 00:05:30,160 Speaker 1: by people like Jim Grant, the Grand Interistrate Observer that 105 00:05:30,440 --> 00:05:34,400 Speaker 1: some of these credits may not be as solid as 106 00:05:34,400 --> 00:05:37,240 Speaker 1: they once were, that maybe the way you account for 107 00:05:37,320 --> 00:05:41,640 Speaker 1: them uh makes those credits look better than they really are, 108 00:05:41,680 --> 00:05:44,200 Speaker 1: and that's something that could also be a concern to investors. 109 00:05:45,080 --> 00:05:48,040 Speaker 1: We have been lending money. We've had an internal credit 110 00:05:48,080 --> 00:05:50,560 Speaker 1: business for well over thirty years and the specifically the 111 00:05:50,600 --> 00:05:53,560 Speaker 1: internal credit is servicing our Case stores and our Jared stores. 112 00:05:53,600 --> 00:05:55,719 Speaker 1: Our sales team have we used a d S for 113 00:05:55,920 --> 00:05:57,880 Speaker 1: for our business there. But we've been doing this for 114 00:05:57,920 --> 00:06:00,880 Speaker 1: over thirty years. We've been through three recessions during that 115 00:06:00,960 --> 00:06:03,880 Speaker 1: time frames, so we've we've been using the same methodology, 116 00:06:03,920 --> 00:06:06,280 Speaker 1: the same agent methodology for over thirty years. And by 117 00:06:06,279 --> 00:06:08,640 Speaker 1: the way, um when we start over thirty years ago, 118 00:06:08,680 --> 00:06:12,320 Speaker 1: that methodology was very commonly used in retail and we 119 00:06:12,360 --> 00:06:13,839 Speaker 1: have been using it for over thirty years, and we 120 00:06:13,880 --> 00:06:16,680 Speaker 1: feel very confident going through the recessions that we have 121 00:06:16,760 --> 00:06:19,440 Speaker 1: a good handle on our credit business, very good handle. 122 00:06:19,480 --> 00:06:21,880 Speaker 1: We have the experience there. I wanted the switch gears 123 00:06:21,880 --> 00:06:25,200 Speaker 1: and step back and look at signat Jewelers. What is 124 00:06:25,240 --> 00:06:27,920 Speaker 1: your business tell you about the health of the US economy? 125 00:06:27,960 --> 00:06:29,880 Speaker 1: Is that good and getting better? Are you concerned they 126 00:06:29,920 --> 00:06:32,400 Speaker 1: might be slowing down a bit? Again, if you just 127 00:06:32,440 --> 00:06:35,440 Speaker 1: look at the at our numbers we reported our fourth quarter, 128 00:06:35,600 --> 00:06:37,560 Speaker 1: we reported that we're up on a comp store basis 129 00:06:37,560 --> 00:06:39,800 Speaker 1: four point five which, by the way, is one of 130 00:06:39,800 --> 00:06:43,240 Speaker 1: the tops of retails that reported retailers reported. Then you 131 00:06:43,279 --> 00:06:45,720 Speaker 1: look at our first quarter results, we're up two point 132 00:06:45,760 --> 00:06:48,560 Speaker 1: four percent, again one of the top performing retailers. And 133 00:06:48,640 --> 00:06:51,760 Speaker 1: what we told um the market during our second our 134 00:06:51,800 --> 00:06:55,000 Speaker 1: first quarter call is that we're projecting that the second 135 00:06:55,080 --> 00:06:57,480 Speaker 1: quarter that are comes will be up one to two 136 00:06:57,880 --> 00:07:00,880 Speaker 1: and so there's there has been a deceleration. Um that 137 00:07:00,960 --> 00:07:03,400 Speaker 1: being said, we're doing all we can. We've got a 138 00:07:03,440 --> 00:07:05,719 Speaker 1: lot of great new innovative products that we're developing. We've 139 00:07:05,720 --> 00:07:08,520 Speaker 1: got a lot of exciting new um TV ads are 140 00:07:08,560 --> 00:07:11,040 Speaker 1: working on, and a lot of new exciting training programs, 141 00:07:11,040 --> 00:07:15,440 Speaker 1: but there has been a deceleration. You have business in 142 00:07:15,520 --> 00:07:18,600 Speaker 1: the UK. There's a big vote next week Brexit. Well, 143 00:07:18,600 --> 00:07:21,520 Speaker 1: the UK vote to leave the EU European Union. How 144 00:07:21,520 --> 00:07:24,200 Speaker 1: would that affect you? Look, we've we've known about the 145 00:07:24,240 --> 00:07:26,640 Speaker 1: brexit um for over a year. We've planned for it 146 00:07:26,880 --> 00:07:28,680 Speaker 1: one way or the other. One thing we've we know 147 00:07:28,880 --> 00:07:32,560 Speaker 1: is that whether the people vote to stay in Britain 148 00:07:32,640 --> 00:07:36,160 Speaker 1: or not, people still fall in love. People still have birthdays, 149 00:07:36,200 --> 00:07:39,960 Speaker 1: people still getting married, people still buying birthday presents. So 150 00:07:40,520 --> 00:07:43,960 Speaker 1: we are ready to adjust appropriately, but our product category, 151 00:07:44,080 --> 00:07:46,800 Speaker 1: we believe no matter what happens, people are still falling 152 00:07:46,840 --> 00:07:49,920 Speaker 1: in love and giving gifts to people. Mark White, the 153 00:07:50,000 --> 00:07:55,200 Speaker 1: chief executive of Signet Jewelers. They operate K Jewelers as 154 00:07:55,200 --> 00:07:58,880 Speaker 1: well as Zales and Jared Jewels store chains. The shares 155 00:07:58,920 --> 00:08:01,960 Speaker 1: of signat jew there's down eighty eight cents today, closing 156 00:08:01,960 --> 00:08:04,880 Speaker 1: at eighty two dollars and ninety nine center down more 157 00:08:04,920 --> 00:08:08,520 Speaker 1: than thirty year to date. You're listening to taking Stock. 158 00:08:08,520 --> 00:08:11,320 Speaker 1: I'm Pim Fox my co host Kathleen Hayes. This is 159 00:08:11,360 --> 00:08:17,600 Speaker 1: Bloomberg Radio. Taking Stock is brought to you by E. T. F. 160 00:08:17,680 --> 00:08:20,760 Speaker 1: Exchange sixteen by Melonsani et F S and Posiums and 161 00:08:20,960 --> 00:08:23,880 Speaker 1: enter nineteen to twenty one in data Point, California. This 162 00:08:24,000 --> 00:08:26,760 Speaker 1: essential conference is complementary for ORI A S, but space 163 00:08:26,880 --> 00:08:28,960 Speaker 1: is limited. Register now at being why melon dot com, 164 00:08:29,040 --> 00:08:29,640 Speaker 1: Slash ETF