The entire jewelry sector suffered in 2009 but, while its rivals saw signs of improvement toward the end of the year, the suffering at Zale Corp. only seemed to get worse.
Last year, the 1,900-door chain restated 2008 and 2009 earnings, reported a 16.8 percent drop in sales to $1.78 billion for its previous fiscal year, as well as a $57.6 million loss for the second quarter ended Oct. 31. Then, as rivals Tiffany & Co. and Signet Jewelers Ltd. reported same-store gains of 12 percent and 7.6 percent, respectively, in the U.S. for holiday, the Dallas-based Zale checked in with a decline of 12 percent for the period. Perhaps there was some comfort in the holiday number since it was better than the 18.6 percent slide reported for November, after which the retailer acknowledged it had cut orders and delayed payments to some vendors.
But apparently its board had had enough. Earlier this month, the company said chief executive officer Neal Goldberg, chief stores officer William Acevedo and chief merchandising officer Mary Kwan had all left. President Theo Killion, the former Tommy Hilfiger, Limited Brands and Macy’s East executive who joined the firm two years ago, took on the additional role of interim ceo, and Gil Hollander, executive vice president and chief sourcing and supply chain officer, took the reins as chief merchandising officer.
Coming off the newly minted management changes, chairman John B. Lowe Jr. said the changes “will help facilitate renewed focus on Zale’s core diamond business.”
One thing Zale won’t have to battle is high expectations. Analysts expect Zale to report a loss of $4.07 a share on revenue of $1.64 billion for fiscal 2010. The buzz about possible “strategic alternatives” continues to grow in volume. The stock, as high as $8.51 last Sept. 16, opened this week at $2.35.