Gina Drosos is the CEO of Signet Jewelers, the company behind brands like Zales and Jared. She sat with ForbesWomen editor Maggie McGrath at Nasdaq MarketSite to discuss the turnaround she’s engineered, the way lab-grown diamonds are affecting consumer tastes, and her leadership tactics since taking the top job at the publicly traded company.
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LifestyleTranscript
00:00Hi everyone, I'm Maggie McGrath, editor of Forbes Women.
00:06Joining us now at Nasdaq MarketSight is Ginna Drossos.
00:10She is the CEO of Cignet, a jewelry brand that has a $4 billion market cap,
00:16and you might know it better for its portfolio companies,
00:20including Jared and Zales and Kay and so much more.
00:24Ginna, thank you so much for being here.
00:26Thank you for having me.
00:27So you became CEO of this company in 2017,
00:30and you were tasked with a pretty significant turnaround.
00:35There were sexual harassment allegations against some folks in the former life of the company.
00:41The stock price was trading close to $17.
00:44It has now more than tripled, more than quadrupled.
00:49Talk to me about what it took to come in and take on this role.
00:53Well, it's interesting.
00:54I had been on the board of directors for a few years,
00:57and so I had really grown to care a lot about the company and about the people at the company.
01:03We did find ourselves at a moment in time when we had a lot of transformation that needed to happen.
01:09But what I knew was that there was a lot of passion and excellence in the team,
01:14and we just needed to unleash that.
01:16So I was fortunate to be selected to come in as CEO and begin a transformation process
01:22that, of course, in a retail company never ends.
01:25But we have had some really great milestones along the way.
01:28Well, I imagine as you come into a company like this, there's a lot to untangle.
01:32You have Kay, Zales, and Jared, and each of those has different consumers.
01:36You have the corporate culture.
01:38Where did you start when you came in?
01:40It was really threefold, and the first thing I started with was listening.
01:45I did a listening tour.
01:47I spent time working in the stores.
01:49I asked the team to make me a key holder so that I could serve our customers directly.
01:54I spent time in our support center.
01:56I visited every one of our different locations from Botswana to Israel to, you know, Dallas to Akron.
02:02I mean, really around the world just to get the ideas of people on our team.
02:06And what came together was that people knew we needed to transform,
02:10so there was a lot of excitement around change, which doesn't always happen.
02:16Sometimes that's the biggest barrier.
02:18But in this case, people wanted to change,
02:21and it became very clear that it needed to be a strategic, financial, and cultural transformation.
02:28So we put strategies in place against all of those.
02:31Strategic, financial, and cultural.
02:33Let's attack each of those step by step.
02:35So strategic.
02:37I've heard you say before that the brands needed to better differentiate themselves.
02:41How did you do that?
02:42Because I do admit, as a consumer who grew up in the suburbs going to the mall,
02:47as a kid I wasn't buying diamonds, but I think I looked at Zales and Kay and Jared as kind of similar.
02:54How do you differentiate them?
02:55You are absolutely right.
02:57They were quite similar.
02:58In fact, they competed with each other more than they differentiated.
03:02And we had a big opportunity to better understand the entire jewelry landscape
03:07and think about how we would compete.
03:09So at the time we had about a 6% market share,
03:12and we said what percentage of jewelry customers could we serve if we made our brands quite different?
03:20Well, today we can serve 80% of jewelry customers across all of our different banners.
03:27We've acquired a few.
03:28We've differentiated the others.
03:30And that gives us room to grow our market share, which we have done.
03:34You've grown it to 10%.
03:35That's a 4% increase in an industry where I imagine it's pretty hard to grow market share.
03:40It is, and great credit to the team for really bringing those strategies to life.
03:44Another great one was digital was really not present in the jewelry category.
03:50So 2017, this is a time when a lot of retail was moving to e-commerce.
03:55We had 5% of our sales in e-commerce, and the jewelry category wasn't much more advanced than that.
04:02We've made investments in digital.
04:04We have very interesting online tools now.
04:08You can try on jewelry online.
04:10You can upload pictures of jewelry that you like, and we'll either match that or show you others.
04:15We now have more than 20% of our sales in e-commerce,
04:19and that's been one of the ways that we've transformed our customer base.
04:23Our customer base is now significantly younger than it was five years ago,
04:28and we've done that through really the investments we've made in digital.
04:31So it's been great for our stores because every jewelry consultant can access our inventory across the country.
04:38It's been great for consumers because we know that 75% of the time,
04:42they go online to browse before they come to the store,
04:45and just great, I think, for the customer base that we've been able to attract.
04:51How much did the pandemic accelerate that?
04:53Because obviously we were home for so long and online shopping more than we were in 2019.
04:58Do you think you are where you are with digital in part because of the pandemic, or was it entirely strategic?
05:04Yes, but thankfully we had made the right investments going into the pandemic.
05:08Otherwise, we couldn't have accelerated the way that we did during the pandemic.
05:13We already had tablets in the hands of every jewelry consultant for a year before the pandemic hit,
05:20so they were very well-versed in how to handle it.
05:23You can imagine once the pandemic hit,
05:26it was important to people to celebrate those few special people they were quarantining with.
05:32We could do that from our tablets,
05:34so we turned every jewelry consultant and store manager into a virtual jewelry consultant and did that online.
05:41Now let's go to the other bucket that you indicated, financial.
05:45I have heard you say that it was important to get small to get big.
05:49Talk to me about closing stores and exactly how you went small to get big.
05:54Right. I think a lot of times it's hard for, you know, that's an easy phrase to say, get small to get big,
06:00but it's really hard to decide to do that because, you know, in the case of closing stores,
06:05every store still has some amount of sales.
06:08So you're deciding to cancel that amount of sales, but oftentimes they're not profitable sales,
06:14or you're spending more time and effort on the fringes and not enough time on the core business.
06:20So actually in my tenure, we've closed over a thousand stores, which on a store base now of 2,800 is a big number.
06:29But by getting smaller to get bigger, our sales per square foot is now up substantially.
06:36Our sales per jewelry consultant, which is great for their financial well-being and ability to serve customers,
06:43is up substantially. So it really was the right strategy, even though it's hard to make that decision in the beginning.
06:50Another piece, and I don't know if this goes to strategy or financial, is the lab-grown gem industry has surged in recent years.
06:59There are some statistics that show that it's 50 percent of some markets or some companies' revenue.
07:04It depends on the company, right?
07:05But younger consumers are looking for a lower entry point for diamonds and gems,
07:11and potentially a more sustainable entry point to buy fancy jewelry.
07:16How much has the lab-grown piece of the jewelry business affected your business?
07:21You know, it's a business that we decided quite early on to participate in.
07:27We're very customer-led, and we were seeing a lot of the same data that you're saying.
07:32We were seeing that younger customers were interested, that it could offer a nice value price point.
07:38Lab-created diamonds aren't rare. You know, they didn't form over a billion years in the earth, so they're different.
07:46But at the same time, they offer an alternative for someone who's looking for value.
07:51So we became part of that industry early on, and I think as a result, we've been a very trusted jeweler in that way.
07:58I mean, we provide quite high-quality and natural diamonds, as well as lab-created diamonds,
08:03and I think there are customers for both of those.
08:05Now, you're wearing some diamonds right now. Where do these come from?
08:09Well, I'm more of a natural diamond person myself, so I did choose that for my engagement ring, for sure,
08:16and certainly for a big signature piece like this.
08:19But the ring I'm wearing is lab-created, and one of the two bracelets I'm wearing is lab-created.
08:24And are they Kay or Zales or Jared?
08:27Well, I try to represent all of us. You know, we're all in this together.
08:31So actually, Zales is here. James Allen and Blue Nile is here.
08:37Jared is over here. So, actually, Kay as well.
08:41Is your jewelry box at home labeled so you get it straight?
08:45No, I remember, actually. I remember the different pieces that I get at different places,
08:50and as I was saying, they're much more well-differentiated now.
08:53So I think, you know, it makes sense to me which one comes from which banner.
08:57As we talk about consumer trends, I mentioned lab-grown.
09:00I saw a report that indicated sustainability is top of mind for a lot of consumers.
09:04What are you seeing among Cignet's customers and the trends where we are right now in 2024?
09:10You know, I would take that sustainability and make it a little bit bigger, too,
09:14and say customers are counting on companies to show, you know, responsibility.
09:20So corporate social responsibility, I think, is important.
09:23That includes diversity, which has been very important at Cignet.
09:27I think that always starts from the top.
09:29When I came onto the Cignet board, I was only the second woman ever to serve on the board,
09:35and now we have the most diverse board in the history of the company and probably in all of retail.
09:42I mean, significantly diverse.
09:44We have the same on my leadership team and throughout our ranks.
09:47So I think that's an example of what customers care about in that whole corporate social responsibility area.
09:54Sustainability is also important.
09:56We are part of UN Sustainable Development Goals and have a number of those goals out to 2050.
10:02But probably the most remarkable aspect of our leadership in that case is responsible sourcing of gemstones.
10:09I can tell my 20-something children, which is, you know, my real torture test,
10:15I can tell them that everything that we sell is responsibly sourced,
10:19and I stand behind it as really, you know, being able to stand for the love it's meant to represent.
10:24And that's very important.
10:25As you talk about the culture, the leadership team, that does get to that third bucket that you mentioned,
10:30and I think 65% of your leadership team is female.
10:33Exactly.
10:34And you are the first female CEO to hold this position at this company. Is that correct?
10:40It is true, although I will tell you we have a great history.
10:44Back in the 1860s, there was a woman named Harriet Samuel, and we still have this banner today called H. Samuel in the U.K.
10:53She took over her father-in-law's failing watch business and turned it into the number one jewelry store chain in the U.K.
11:00Interesting.
11:01So we do have a long history of women leaders, but certainly in the modern era.
11:06Well, the gender dynamics in jewelry are really interesting to me.
11:09The fact that you are the first is, of course, remarkable, but so many women wear jewelry,
11:14and yet I think there's been a stigma to buy it.
11:17It's like you wait for a family member or a potential spouse to buy a big piece for you.
11:24What are you seeing in terms of consumer behavior, and are more women buying jewelry for themselves,
11:30or is it the bridal moments, the engagement moments that are still the big jewelry moments in a consumer's life?
11:36It's a fantastic trend now.
11:38We are definitely seeing more women buying jewelry for themselves, which I think is fantastic.
11:44It's to celebrate a promotion, or they buy something for my sister or my sister-in-law kind of a thing,
11:52or just because I buy myself some great earrings because I think it would look good with the jacket I just got.
11:58We're seeing a lot more of that than we ever did before, and I think that's enabled also by the innovation that we've been bringing.
12:06We knew this was going to be a year with a reasonably tough macro backdrop, a lot of uncertainty,
12:12and so we've really leaned into newness as an example, and because of the scale of our company,
12:17we can source fantastic product often at a lower price point than many of our competitors,
12:24and so we've used that value scale to bring a lot more newness.
12:29Our newness is up to 25% of our total sales, which is a really high number.
12:35It's up 800 basis points versus last year in the second quarter.
12:39So when you say newness, what does that mean?
12:41Is that a specific product, or how does that manifest on the consumer experience?
12:46Newness is any product that was introduced within the last 12 months.
12:52So even a classic piece like Diamond Stud earrings, we might change the basket setting to make it a little bit higher profile
13:00or lower profile or change the clasp to make it a little bit tighter or fit better.
13:05Any of those things on core jewelry or on brand new jewelry would be considered newness.
13:11So another example would be sculpted gold pieces.
13:14Gold is through the roof on its cost right now, but customers still really love a big gold look.
13:22We've worked with our Italian factories to create something called sculpted gold, which is more of a hollow gold.
13:29So think about like a chain link that maybe started almost like a straw,
13:34where you put the gold around the outside and then it's hollow in the inside.
13:40You can get a really big look, but it's not so heavy and it's not as costly.
13:45So these are the kinds of things that a company like ours can bring.
13:48It's a great innovation for self-purchase.
13:51That is so interesting.
13:52As you talk about innovation, I'm thinking about your background.
13:55You had a stint as an entrepreneur and you also worked at Procter & Gamble for over two decades.
14:01Can you talk about how this background taught you things about business and what you take from it to Signet?
14:08Sure. I think the most important thing is to really understand consumer needs and desires.
14:14So in the example I just gave you, big gold looks are important, but because gold is so expensive,
14:22they can become unaffordable unless we can innovate to find a way to meet that need.
14:28That's exactly what we did at P&G Beauty.
14:31I started working in the beauty business when it was quite small at P&G.
14:35I was part of a team that grew it to be the number one beauty company in the world,
14:39and we did it by really understanding what consumers want in their skin care, their mascara, their hair care products, hair color.
14:47I mean, all of these are businesses that I worked on and really enjoyed.
14:50What about your time as an entrepreneur? Did you enjoy that?
14:53Do you see yourself as an entrepreneur even though you are a CEO for a corporation?
14:58It's so funny that you say that.
15:00The reason why I went to become an entrepreneur is because I had been part of growing a beauty company
15:07inside the world's largest soap and diaper company.
15:10To me, that felt quite entrepreneurial.
15:14I mean, we were doing things differently.
15:15We were bringing some different skill sets or mindsets into the company.
15:20I remember when I went to go visit an Amazon distribution center very early on,
15:27thinking about what would the Internet mean to our products.
15:31We took secret to be the first brand at P&G that was purely marketed through digital media.
15:37So we were innovators in a lot of ways within P&G and also benefited a lot from the core strengths of the company.
15:44But I thought, oh, I was kind of entrepreneurial.
15:47And then I looked in the mirror one day and I thought, are you really?
15:50You know, does that go together?
15:53And so I went and I ran a startup company in a science kind of field, in life sciences.
15:59And I'm definitely not a scientist, but I could understand the consumer need.
16:03I could understand the technology.
16:05I surrounded myself with really bright people who helped.
16:09And we grew that company 12 times to help more mental health patients get on the right medicine.
16:15So it was exciting.
16:17And it was that growth.
16:18You were a board member for Cignet.
16:20And then they said, hey, we like what you did at the startup, so come here.
16:23Yeah, and your background at P&G.
16:25And, you know, I had a great track record always of building diverse teams.
16:30And for me, that's because it's a business strategy.
16:33I think if you want to be an innovator, then you have to surround yourself with a group of people who see 360 degrees.
16:40I mean, I can never see my own blind spots.
16:42So I can't always see, you know, young upstart competition coming unless I have a team that's really seeing more holistically.
16:51So I think if you want to be an innovative company, if you want to see around the corner, you have to build diverse teams.
16:56And that's been a hallmark of my track record.
16:59Speaking of young upstart companies, how much pressure do you feel from startup founders,
17:03from young women who are founding jewelry companies to chase after the same demographics you're chasing after?
17:09You know what?
17:10I think that is always the group to be the most paranoid about.
17:13I mean, that, you know, great ideas come when you are unencumbered with process,
17:19when you don't have to do things the way that they were done before.
17:23That's the kind of spirit that we try to create at Cignet.
17:26And our employee engagement scores would say that we've done a good job of creating an innovative company,
17:33that people feel like they can be themselves, they feel proud to work at the company,
17:37they feel like they understand their role in the strategy.
17:40But I think smaller companies tend to be able to grab onto ideas and move quicker.
17:48So it's super important as a big company to be humble and not think that you, you know, we're number one,
17:55therefore we must know everything.
17:56I think it's quite the opposite.
17:58We're speaking in September, so still a few months left in 2024.
18:02What are the biggest consumer trends that you are watching in jewelry right now?
18:06I mentioned yellow gold.
18:08It's very hot right now, despite the high price points.
18:11In fact, maybe because of, I think people know that it is, you know, something that holds its value.
18:17So the sculpted gold, the hollow gold, I think will be very big.
18:21Lab created in fashion definitely will be big.
18:24We're also seeing a return to engagements.
18:27You know, it's interesting.
18:29I mean, COVID happened in 2020.
18:30So now we think, oh, that's long gone.
18:32But for the jewelry industry, it's actually just ending.
18:36It's about three years between when a couple meets and when they get engaged.
18:41So our COVID was really in 2023 and ended the first part of 24.
18:46But now that's ending and we're seeing engagements come back.
18:49So I think natural diamond engagement rings are going to be really hot this holiday season.
18:54Interesting.
18:55So there really was a decline in 2023.
18:58Oh, yeah.
18:59There were 25% fewer couples who got engaged last year versus a typical pre-COVID year.
19:05And it was down 12% the year before that.
19:08And now it's coming back.
19:09And now it's coming back.
19:11Well, I'm going to have to let you go soon.
19:12But before you go, I have to ask, because you joined our 50 over 50 list this year.
19:17You were one of the people listed, which is a list that honors women who are stepping into their most important, impactful professional roles after the age of 50.
19:27So I'm wondering, Jenna, did you ever imagine your career over the age of 50 when you were 20 or 30?
19:34No, I never could have imagined it.
19:36But what I'm most excited about is the wisdom to mentor the next generation.
19:43I mean, there are so many.
19:44You talk about entrepreneurs.
19:46I see it in my company.
19:47I just think that women leaders, all of our leaders, have so much potential.
19:53And so I love the opportunity to do that.
19:56And I'll tell you, of any honor I've ever gotten, that's the one my kids were the most excited about.
20:01Really?
20:02So, yeah, thank you.
20:03I was right next to Celine Dion.
20:04They were like, wow, mom.
20:07We do rate the bios alphabetically.
20:09We don't like to do a ranking, right?
20:11Because how do you compare a singer to a CEO?
20:14We try to have sector diversity.
20:16But talk about mentoring the next generation.
20:18If you could go back and give your 20-something self advice, knowing what you know now as a CEO,
20:24as someone with great corporate and entrepreneurial experience, what would you tell young Jenna?
20:29I would say acquire experiences.
20:32I mean, don't make your career path so linear that you're worried about when's my next promotion
20:38or I don't want to move off track.
20:40I think that today's leaders really need to have, they need to be able to ask questions in a lot of different areas.
20:48You know, I would have said to young Jenna, don't just, you know, be a brand manager in marketing.
20:53Go work in finance.
20:54Go work in supply chain.
20:56Go, you know, go, you know, like I ultimately ended up doing.
21:00Work for a big company.
21:01Work for an entrepreneurial company.
21:03See the difference.
21:04Understand a resource-rich environment versus a we have to have the cash to make payroll on Friday kind of an environment.
21:12I think that really gives leaders a more well-rounded point of view.
21:18Jenna Drozos, thank you so much for joining us at NASDAQ MarketSight.
21:22We so appreciate your time.
21:23Thank you. This was great. I appreciate it.