Majors

Save E-mail Print Most Popular RSS Reprints

Sales down 18 percent for Zale

February 25, 2009

Similar Stories | Topics

Dallas--Revenues fell 17.9 percent in the second quarter of fiscal 2009 for jewelry chain Zale Corp., with the retailer slashing staff and closing stores in the face of the global economic crisis.

Sales for Zale dropped from $828 million in the second quarter of 2008 to $679 million in the second quarter of 2009, ended Jan. 31.

During that same period, same-store sales declined 18.1 percent.

In a conference call on Wednesday morning, Zale Chief Executive Officer Neal Goldberg said the company was "very disappointed" with its results for the holiday period.

"Originally our strategy emphasized emotion," he said.

During the course of the holiday season, however, it became apparent that this strategy wasn't working, given the heavily discounted retail environment and competition from Friedman's and Whitehall Jewelers, both of which were conducting going-out-of-business sales.

To compete, Zale began aggressively discounting merchandise, a strategy it has reversed since the end of the holiday season.

"Immediately following Christmas, we returned to a strategy that emphasized emotion with a promotional posture that is item-specific," Goldberg said. "The result has been more normalized 50 percent margins, along with comparable-store sales improvement since the trends at the holiday. These comparable-store sales and margin improvements have held from January through the Valentine's Day selling period."

When asked later in the call about the improvement in same-store sales, Goldberg declined to release specific figures, but said despite the improvement, same-store sales remain down for the Dallas-based chain.

Also on Wednesday, Zale revealed details of the second phase of its cost-reduction plan launched in February 2008, a phase intended to generate a total of $140 million in savings.

As part of the plan, Zale eliminated a total of 245 "corporate support area" positions in February--170 staffed and 75 open positions. The majority of the cuts were made at the company's Dallas headquarters, which employs more than 900.

The company aims to save another $34 million by closing 115 underperforming stores between now and July 2010.

Zale Corp. operates a total of 2,086 stores in the United States, Puerto Rico and Canada under brands including Zales Jewelers, Gordon's Jewelers and Piercing Pagoda.
Save E-mail Print Most Popular RSS Reprints
Post a Comment
* Required field
* Author:
* Comment:
 

Majors

Zale slapped with shareholder class-action suit

A shareholders' class-action lawsuit has been filed against Zale Corp., its chief executive officer and three former executives, claiming the Irving, Texas-based, 1,931-store chain deliberately deceived investors. Read More

JCOC: 11 percent to purchase jewelry this holiday
Penney's 'Doghouse' lives to bark another season
More Majors

More Like This

Zale's jewelry: Price nice, but emotion works better
April 30, 2009 | National Jeweler Network
Zale customers to share their love stories
March 09, 2009 | National Jeweler Network
Zale settles lawsuit over 'Love Rocks'
February 18, 2009 | National Jeweler Network
Zale sued over 'Love Rocks' campaign
February 17, 2009 | National Jeweler Network
Zale CFO Carter resigns, Gordon in interim role
January 21, 2009 | National Jeweler Network
TOPICS
Business | Culture and Lifestyle | Holiday Sales | Holidays

Design Portfolio

advertisement

Video

Small multi video player located on right rail of NJN site

advertisement

Sponsored by:

Retailer Toolbar

America's Best Jewelers
Join the ONLY Social Network for Jewelry Retailers. Get access to expert content, peer best practices, and more.
Start networking today.
Newsletters
Newsletters
Topic-specific newsletters that deliver the latest news on jewelry, diamonds, wholesale operations and high-volume buying directly to your in-box.
Reader Connect
ReaderConnect
Supplier information presented with every article, bringing you related, actionable content on every topic.
Jewelry Yellow Pages
Yellow Pages
A comprehensive listing of associations, organizations, suppliers and services for the jewelry industry.
Classifieds
Classifieds
A comprehensive listing of job postings, product offerings and other materials for sale for the jewelry industry.
NJN Customer Connect
CustomerConnect
The most sophisticated suite of marketing services available for jewelry retailers, from Internet tools to data marketing.

advertisement