Zale Names New President and CEO
By Rob Bates -- JCK Online, 9/1/2006 2:00:00 AM
In a surprise move, Betsy Burton, 54, who was named interim chief executive officer of Zale after Mary Forte resigned in February, now holds that job permanently.
Before becoming interim CEO, Burton was a member of the Zale board of directors for three years. She has a reputation as someone who turns around troubled companies and previously served as CEO of Supercuts, PIP Printing and Document Services, and Cosmetic Center as well as interim CEO of Tower Records and toysrus.com. She has also served on the board of Staples and Rent-a-Center.
In a statement, Zale chairman of the board Richard C. Marcus said Burton had done a “superb job” in her six months as interim leader and had improved profits and market share.
Burton had previously told analysts in a conference call she wasn't interested in the job. But “as she became more involved in the company and looking at the opportunities, she became more energized and excited about being a part of the long-term future of the company,” says David Sternblitz, vice president and treasurer. “She has a proven track record and she will continue on with the strategy that she's put in place over the past six months.”
Sternblitz said Burton's priorities are shoring up the key management team, returning profitability to the business, focusing on the Zale brand, and enhancing “the customer experience.”
Zale stock rose following the announcement, and analysts said Burton's appointment could make Zale a better candidate to be sold. Burton has previously said Zale is not for sale, and proposed merger talks with Sterling fizzled.
Although the Dallas Morning News recently cited “speculation that Zale may be taken private,” Sternblitz noted that “the board has a fiduciary responsibility to evaluate any offer, but it's not anything they are actively seeking.”
In recent years, Zale has struggled with stagnant sales and profits. In April it announced it was being investigated by the Securities and Exchange Commission, and about a month later its chief financial officer was placed on indefinite leave for allegedly “failing to disclose” a delay in vendor payments. Recently, it became the subject of several class-action lawsuits (see sidebar).
