DINICOLA BACK AT ZALE
Byline: David Moin
NEW YORK — Robert DiNicola is returning to Zale Corp. on Feb. 21 for a second tour as chairman and chief executive officer, and a second chance to test his turnaround skills there.
Ironically, he succeeds Beryl Raff, a longtime associate he recruited to Zale and groomed as his successor. But with the $1.8 billion company and much of the jewelry sector faltering last year, Raff resigned Friday. She lasted just 18 months as ceo and six months as chairman and ceo.
According to Zale, Raff resigned “to devote more time to her family and her own personal interests.” She could not be reached Monday, when her departure was announced.
She’s leaving on a down note, unlike DiNicola who left Zale in September 1999 like a knight in shining armor, when the jewelry sector and the company were still on a high. He put Zale on the fast-growth track, and even after relinquishing the ceo post, continued for about another year as chairman, until that title, too, was given to Raff. It was widely believed that Raff had accumulated enough experience in corporate leadership, on top of having lengthy experience in jewelry specifically, to take the reins.
While Raff may have fallen short dealing directly with the demands of Wall Street in a tough economic climate, she’s still considered a strong merchant and operator. She rose to the top of Zale as a result of her solid reputation as a merchant there for six years and her close working relationship with DiNicola. The two first worked together more than 20 years ago at Macy’s in the home area, where he was a buyer and she was an assistant.
Among the highlights of her career, Raff was senior vice president of the jewelry business at Macy’s East. She joined Zale in 1994 as president of the Zales Jewelers division and was promoted to president and chief operating officer of the corporation in July 1998.
Recently, Zale has seen sales slip and a declining stock price. On Monday, Zale’s shares lost $2.63, or 7.5 percent of their value, to close at $32.67 on the New York Stock Exchange. Volume topped 4.2 million shares, more than nine times the stock’s average level.
During the past year, Zale’s stock has gone as high as $51 and as low as $23.38
For the second quarter ended Jan. 31, comp-store sales declined 2.3 percent, compared to an increase of 14.7 percent for the same period the year before and an increase of 3.3 percent in the quarter preceding. The 2,300-unit specialty retailer, considered the largest fine jewelry chain in the country, plans to announce second fiscal-quarter earnings on March 7.
During his sojourn from Zale, DiNicola did a lot of sailing and reportedly sought bigger opportunities, including the ceo job at J.C. Penney Co., which has been filled by Allen Questrom. Prior to working at Zale, he was ceo of The Bon Marche division of Federated Department Stores.
When DiNicola first joined Zale as ceo in April 1994, the retailer had much deeper problems than it currently has. It emerged from bankruptcy in 1993 after being saddled with heavy debt and DiNicola discovered it was being run like a loose network of mom-and-pop shops, with some stores even closing early for inventory during the peak Valentine’s Day period.
But he refocused the business by closing many doors, eliminating a host of nameplates in different regions of the country and giving the remaining three divisions — Zales Jewelers, Gordon’s Jewelers and Bailey Banks & Biddle — clearer images, pricing, merchandising and growth strategies. A big part of his agenda was to reconfigure Zale as “a gift-giving headquarters to appeal to customers all year long,” he once said.
After the company got on firmer footing, he put it on an acquisition and expansion path, and launched Zale.com, which he has said he sees growing to a $100 million business.
He also launched an outlet division. Among the acquisitions under his stewardship: Peoples Jewellers in Canada and Piercing Pagoda, which operates kiosks selling gold.
DiNicola could not be reached for comment Monday.