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Monday, June 21, 2010

Will Zale Corp. Disappear?


I’d like to thank noted journalist and watch expert William George Shuster for alerting me to this story. The Web site 24/7 Wall Street recently released a list of brands that it says will disappear in 2011, and among those mentioned is Zale Corp. The Irving-Texas based company has been struggling for the past few years and has undergone several management changes during that time.

The specialty retailer of fine jewelry in North America owns Zales, Zales Outlets, Gordon Jewelers, Peoples, Mappins, and Piercing Pagoda. The company was founded in 1927 by the Zale Brothers and was one of the earliest retailers to offer credit for its customers.

The story in the financial publication mentions that in the last quarter the company lost $12 million on revenue of $360 million and it recently made the Forbes list of companies with extreme financial list. Its market value is $78 million. The article mentions the company is competing in crowded field that includes bog box retailers such as Wal-Mart and its traditional rivals such as Sterling Jewelers.

The company recently received some funding from Golden Gate Capital but the publication says it will just delay the inevitable.

Zale has pulled itself from the brink in the past. Let’s see if it can do it again.

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