Zale Corporation

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Zale Corporation
Type Public (NYSE: ZLC)
Founded 1924 (Wichita Falls, Texas)
Headquarters Irving, Texas
Key people Neil Goldberg, President & CEO
Rodney Carter, CFO
Industry Retailing
Revenue ▲$2.4 billion USD (2006)
Operating income ▼$90.7 million USD (2006)
Net income ▼$54.5 million USD (2006)
Employees 16,300
Website www.zalecorp.com
"Zale" redirects here. For other uses, see Zale (disambiguation).

Zale Corporation (NYSE: ZLC) is the second largest specialty retailer of fine jewelry in North America, operating 2,203 retail locations, (which includes both kiosks/carts and stores) throughout the United States, Canada, and Puerto Rico as of October 31 2007 [1]. Zale Corporation is comprised of several different business units:

  • Zales Jewelers: The flagship brand and main focus of the company. Their main competition is Kay Jewelers. Zales has returned to their slogan "The Diamond Store" (which was their slogan before "Be Brilliant") and a focus on the middle-income market. As of October 31 2007 there were 796 Zales Jewelers stores. [2]
  • Zales Outlet: The outlet version of Zales that carries a large amount of clearance merchandise. There are several differences when compared to traditional Zales stores, such as returns not being accepted and "every day low prices" used, compared to Zales' sales and discounts. As of October 31 2007 there were 137 Zales Outlet locations. [3]
  • Gordon's Jewelers: The company's regional chain that focuses on a slightly higher market than Zales. Gordon's also focuses more on the bridal market than Zales. The current slogan as seen in their catalog valid through October 11, 2007 is "Love. Then, Now, and Forever". Recently Gordon's has started to carry many of the same jewelry collections as Zales. There were 282 Gordon's Jewelers locations as of October 31 2007. [4]
  • Piercing Pagoda: A kiosk chain that focuses on lower-end merchandise such as 10K gold and sterling silver chains, charms, and bracelets. Cubic zirconia jewelry is also a featured offering. Their business is driven through ear piercing. Some locations have different nameplates, such as "Piercing Pagoda Too", "Totally Pagoda", "Plumb Gold", or "Silver & Gold Connection". There were 792 Piercing Pagoda locations as of October 31 2007. [5]
  • Peoples Jewellers: The Canadian version of Zales. They are differentiated by having exclusive diamond solitaires, some of which are mined in Canada. Also known as "The Diamond Store". There were 196 Peoples locations (including Mappins locations in that number). [6]
  • Mappins Jewellers: Canadian chain. Targets a higher-end market than Peoples. Many of their collections are similar to Peoples.

Zalecorp also operates two Internet-based enterprises--Zales.com and Gordonsjewelers.com, --through a partnership with GSI Commerce. [7]

Zale used to operate leased fine jewellery departments (in department stores) known as Diamond Park Fine Jewelers, but sold off the chain to Finlay Enterprises in 1997.[8]

In fiscal year 2006 Zale Corporation tested a repair store concept, branded as Master Jewelry Repair. The concept was deemed a failure and all three test stores were closed in 2006. The stores were similar to Fast Fix Jewelry Repair locations.

Zale closed all 86 Peoples II kiosk and cart locations in Canada in 2007. The concept was meant to be the Canadian version of Piercing Pagoda, but ultimately failed.

In the first quarter of fiscal year 2008 Zale Corporation sold the Bailey Banks & Biddle upscale jewelry chain to Finlay Enterprises. [9]

Contents

[edit] History

The company began in 1924 in Wichita Falls, Texas, when Morris (M.B.) Zale, William Zale, and Ben Lipshy opened the first Zales Jewelers store.[10] At the time, credit plans were not common, so their concept of offering one was fairly revolutionary, marketed under the slogan, "a penny down and a dollar a week." By the beginning of World War II, the company had expanded to a dozen stores throughout Texas and Oklahoma.

During the lean war years, Zales maintained its prices and looked for expansion opportunities. In 1944, Corrigan's of Dallas was acquired, a finer jewelry purchase that eventually launched the Bailey Banks & Biddle brand.

The year 1957 was marked both by Zales' first entry into a shopping center (rather than stand-alone downtown locations), and the company's listing on the American Stock Exchange.

In 1984, the company was bought out by a Canadian and Austrian consortium, and in 1989, the entity bought Gordon's Jewelers.

[edit] Legal Actions

In August 2006, a legal class action complaint was brought against Zale Corporation, on behalf of common stock purchasers between early 2005 and May 2006. The complaint charges Zale and certain of its officers and directors with violations of the Securities Exchange Act of 1934, specifically for omitting or misrepresenting material adverse facts about the company's financial prospects. [11]

[edit] Notes

  1. ^ Zale F1Q08 Earnings Call transcript. Seeking Alpha (2007-11-20). Retrieved on 2007-11-27.
  2. ^ Zale F1Q08 Earnings Call transcript. Seeking Alpha (2007-11-20). Retrieved on 2007-11-27.
  3. ^ Zale F1Q08 Earnings Call transcript. Seeking Alpha (2007-11-20). Retrieved on 2007-11-27.
  4. ^ Zale F1Q08 Earnings Call transcript. Seeking Alpha (2007-11-20). Retrieved on 2007-11-27.
  5. ^ Zale F1Q08 Earnings Call transcript. Seeking Alpha (2007-11-20). Retrieved on 2007-11-27.
  6. ^ Zale F1Q08 Earnings Call transcript. Seeking Alpha (2007-11-20). Retrieved on 2007-11-27.
  7. ^ Gordon's Jewelers Launches Its First Webstore with E-Commerce Solution Partner GSI Commerce. PR Newswire (2007-5-11). Retrieved on 2007-06-06.
  8. ^ Staff of JCK-Jewelers Circular Keystone (1997). Finlay to Buy Assets of Zale Corp's Diamond Park. JCK. Retrieved on 2007-02-17.
  9. ^ Zale F1Q08 Earnings Call transcript. Seeking Alpha (2007-11-20). Retrieved on 2007-11-27.
  10. ^ Zale Corporation (2005). Zale Corporation: Our History. Corporate homepage. Retrieved on 2006-09-17.
  11. ^ Steven J. Toll (August 23, 2006). Cohen, Milstein, Hausfeld & Toll, P.L.L.C. Announces Class Action Lawsuit Against Zale Corporation. Business Wire. Retrieved on 2006-09-17.

[edit] External links