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Zale Taps Neal Goldberg as CEO

Neal Goldberg, a veteran of Macy's, Victoria's Secret and Gap Inc., has been named president and chief executive officer of Zale Corp., the $2.5 billion...

Neal Goldberg, a veteran of Macy’s, Victoria’s Secret and Gap Inc., has been named president and chief executive officer of Zale Corp., the $2.5 billion jewelry retailer.

This story first appeared in the December 21, 2007 issue of WWD.  Subscribe Today.

Goldberg will succeed Betsy Burton, the ceo since February 2006. Burton replaced Mary L. Forte, who resigned after three years because of lagging financial returns. A former ceo of Supercuts Inc., PIP Printing and Cosmetic Center Inc., Burton had a reputation in the industry as a turnaround specialist. She has a two-year consulting agreement with the company.

Zale reported a net loss of $28.4 million for the first quarter ended Oct. 31, versus a loss of $26.4 million a year ago. Quarterly revenues declined 1.2 percent to $377 million compared with $382 million last year.

The quest for permanent leadership hasn’t been Zale’s only challenge in recent years.

In April 2006, the Securities and Exchange Commission started an investigation into certain accounting practices of the Irving, Tex.-based firm. The probe looked at accounting for extended service agreements, leases and accrued payroll.

Three months later, Zale was hit with three shareholder class action lawsuits alleging that the company misled investors about its financial condition. According to the allegations in each of the three complaints, company executives issued false and misleading financial results to the market during the class period to artificially inflate the price of Zale’s shares.

In September 2006, Rodney Carter was named group senior vice president and chief financial officer, a title he still holds. The SEC probe was terminated with no enforcement action being recommended.

Goldberg, who also joined the company’s board, said on a conference call Thursday that Zale “has a lot of good things going for it — a solid foundation of great brands, dedicated customers and enthusiastic associates. I’m encouraged by our initiatives, which include growing our core mall business, increasing gross margins and generating value for shareholders.

Goldberg most recently was president of The Children’s Place Retail Stores Inc., a specialty retailer of value-priced apparel and accessories for children.

In September, The Children’s Place ceo Ezra Dabah resigned after an internal investigation revealed violations of the company’s policies and procedures. The board named Chuck Crovitz, a board member, as interim ceo. An investigation by the company’s audit committee showed that in two instances Dabah did not comply with The Children’s Place internal policies related to securities trades.

 

Zale’s chairman Jack Lowe Jr. said Goldberg’s selection “is a culmination of a careful and thorough search by the board. When Betsy took the ceo job, it was to develop a strategy to position the company for success and then provide a leadership strategy to a new leader. Neal is ideally suited to lead Zale at this time.”