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Why is Signet Jewelers (SIG) Stock Tanking Today?
On Thursday, shares of jewelry company Signet Jewelers Ltd. (SIG - Free Report) are tanking, down almost 8% in afternoon trading after James Grant’s investment newsletter brought up some concerns about the company’s credit operations.
According to Bloomberg, Signet, which owns jewelry brands Kay, Zales, and Jared, has been criticized for using credit to boost its sales. Its critics are claiming that the jeweler is now more a finance company than a jewelry company, which significantly increases its risks.
The latest edition of the newsletter also called Signet the next Lumber Liquidators (LL - Free Report) .
Another contributing factor to SIG’s downward performance are recent reports that employees at Kay are swapping out customers’ diamonds with cheap imitations. A Facebook page called Boycott Kay Jewelers has even popped up, with consumers alleging more issues like poor jewelry construction, shoddy repairs, and rings that were swapped out for other bands.
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