Retailer News

The year 1999—both fiscal and calendar—was very good for the Zale Corp., North America's largest retail jeweler, as noted in recent reports and announcements.

Fiscal year 1999 (ended Aug. 31, 1999) marked the fifth consecutive year in which Zale posted a net earnings gain of more than 20%. The company had earnings of $80.8 million, a 27.7% gain, on net sales of $1.4 billion. Since the company initiated its “back to basics” turnaround strategy in 1994, when chairman Robert DiNicola took office, it has seen a 55% increase in net sales.

Calendar year 1999, the company's 75th anniversary, saw Zale enter the international market with its acquisition of Peoples Jewellers, Canada's largest retail jewelry chain and Zale's former owner. Zale expects to expand Peoples' per-store business to $1.2 million in five years (up from $700,000).

Zale announced its succession plan in September. Company president Beryl Raff, who was instrumental in the five-year rebuilding of the national brand, added the title of chief executive officer. Former CEO DiNicola continues as chairman of the board.

The company also is expanding its e-commerce presence. It's developed a TV advertising campaign to promote its redesigned online shopping site (www.zales.com); added enhancements that make browsing and shopping on the site easier and quicker; organized a department focused on online opportunities; and negotiated agreements with America Online, Yahoo!, and GiftCertificates.com to be a featured merchant in their jewelry and watch categories.

For the first quarter of fiscal 2000, ended Oct. 31, 1999, Zale announced a whopping 59% increase in operating earnings ($16.5 million). Net sales rose 26.9% (to $322.6 million) and comparable store sales increased 10.1%.—William George Shuster