What happened

Shares of Signet Jewelers (SIG -1.19%) were down sharply on Monday amid a broad-based market sell-off sparked by a sharp drop in oil prices and fears of a global virus pandemic.

As of 1:30 p.m. EDT, Signet's shares were down about 12.3% from Friday's closing price.

So what

Signet is the world's largest diamond retailer, with a focus on the so-called mid-market, a level below luxury brands. The company owns several chains of jewelry stores, including Zales, Kay Jewelers, and Jared. Many of its stores are located in shopping malls.

Gold and silver rings in a jewelry store's case.

Image source: Getty Images.

Signet is already in the midst of an overhaul, with a plan to close hundreds of mall stores in response to dwindling foot traffic and boost online sales. But pressures will increase if measures to stop the spread of the novel coronavirus keep consumers out of stores -- or worse, if the U.S. economy slides into recession.

Now what

Signet had a strong holiday season, enough to raise its guidance for the fiscal year that ended on Feb. 1. It's due to report its fourth-quarter results on March 26. Those results might be good, but the guidance it gives to investors for the year to come could be sobering.