Zale Corp.’s stock tum-bled 26 percent Friday after it reported a sharply higher fourth-quarter loss and a Securities and Exchange Commission investigation into accounting adjustments that led the jeweler to restate 2008 and 2009 earnings millions of dollars lower.
Zale disclosed the investigation began in September after the firm said it needed to postpone the release of fourth-quarter results for an accounting review, which included its treatment of advertising costs, according to vice president and treasurer David Sternblitz.
“News of the SEC investigation is disappointing,” Sternblitz told WWD. “It’s been a disappointing quarter and year.”
The SEC declined to comment, but according to Zale’s filing, the firm originally posted a $10.8 million profit in 2008. Upon review, net income was restated at $631,000, or 1 cent a diluted share.
Zale said its fourth-quarter loss widened to $89.8 million, or $2.81 a share, from a loss of $10 million, or 30 cents, a year earlier. Special charges totaling $2.22 a share hurt results, while other items helped the bottom line last year.
Revenue for the quarter ended July 31 declined 31 percent to $357.1 million from $456.2 million. Analysts anticipated a net loss of $1 on sales of $335 million. Comparable-store sales for the fourth quarter slid 21.2 percent.
“We feel that the business is improving,” Sternblitz said, explaining first-quarter comp declines have moderated to 8 percent.
With refreshed merchandise, leaner inventories and less competition this year from jewelers liquidating their inventories before going out of business, Sternblitz said Zale has an opportunity to gain market share this holiday. The company has closed over 200 underperforming stores and now has 1,930 units.
For the year, Zale posted a net loss of $189.5 million, or $5.94 a share, including after-tax charges of $92.6 million, or $2.90. Sales sank 16.8 percent to $1.78 billion from $2.14 billion.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye