(Reuters) - Signet Jewelers Ltd (>> Signet Jewelers Ltd.) said Chief Executive Michael Barnes resigned to be closer to his family, becoming the second top executive in three months to leave as the company digests its acquisition of Zale Corp, its largest deal so far.
Shares of Signet, which also reaffirmed its third-quarter and full-year profit and sales forecast, fell as much as 5.4 percent in early trading on Tuesday.
Barnes, who has been CEO since January 2011, resigned as he wanted "to relocate nearer to his family", the same reason Ronald Ristau gave when he resigned as chief financial officer in July.
The parent of Kay Jewelers said Chief Operating Officer Mark Light would succeed Barnes, effective Oct. 31.
Nomura Securities analyst Simeon Siegel said the two departures seemed unrelated. He said Barnes' resignation was not too much of a surprise, citing the CEO's comments on the company's last quarterly conference call that suggested a shift in the responsibility of day-to-day operations to Light.
"Signet is passing the CEO baton to someone with proven success and execution of the business. We believe Mark has been instrumental and involved with all aspects of the recent guidance," he said, reiterating his "buy" rating on the stock.
Light, in 2006, was made CEO of Signet's Sterling division, which operates over 1,400 stores in 50 U.S. states, mainly under the brand names Kay Jewelers and Jared The Galleria Of Jewelry. Under Light's watch, Sterling's sales have more than tripled.
"Mark Light is a very strong choice to lead the company, with 36 years of experience at Signet and having grown the U.S. business to the powerhouse that it is today," Sterne Agee analysts wrote in a note. They have a "buy" rating on the stock.
Light will receive a base salary of $1.1 million and will be eligible for an annual bonus with a target of 125 percent of his base salary, the company said in a regulatory filing.
Barnes joined Signet in 2010 as CEO designate and took the post in January next year. He was at the helm when the company bought smaller rival Zale Corp in February this year.
The deal, which closed in May, combined the two largest U.S. mid-tier jewelry store chains, Zales and Signet's Kay Jewelers.
Signet said Light was "deeply involved" in the acquisition and its ongoing integration, which was proceeding as planned.
The company said it remained confident of achieving its 3-year synergy expectations of $150 million to $175 million.
Before joining Signet, Barnes was chief operating officer of accessory maker and retailer Fossil Group Inc (>> Fossil Group Inc).
Signet shares were down 1.3 percent at $106.47 in afternoon trading on the New York Stock Exchange. The stock has risen 37 percent so far this year, far outstripping the less than 1 percent rise in the S&P 400 specialty retail index <.SPMDCSPR>.
(Editing by Savio D'Souza)
By Devika Krishna Kumar