Zale Corp., North America’s largest specialty retailer of fine jewelry, on Wednesday reported a net loss, of $23.7 million for the company’s first quarter ended October 31. The loss includes an after-tax non-cash impairment charge related to the closing of approximately 30 Bailey Banks & Biddle locations of $5.3 million. Excluding the charge, the Dallas-based company reported a net loss of $18.4 million. For the same period a year ago, it reported a net loss of $10.9 million.

Total revenues for the quarter were $428 million compared to $423 million during the first quarter of the previous year, an increase of 1.2%. Comparable store sales for the first quarter decreased 1.2%.

“Our earnings performance was negatively affected by the repositioning at the Zales brand,” said Mary L. Forte, president and CEO. “The many new initiatives at Zales created more short-term disruption than we anticipated, including temporarily extending the lead time for receipt of new merchandise. Additionally, as part of our strategy, we shifted away from several low margin promotional sales events in the quarter, which had a negative impact on the Zales business. We have made a number of significant changes at the Zales brand in a fairly condensed period, but we believe these changes are essential to successfully reposition Zales for long-term market share growth.”

Forte continued, “While we are disappointed in these temporary execution issues, we remain focused on our plan. Our $45 million stock repurchase during the first quarter signifies the confidence we have in our business. We are aggressively flowing new merchandise to our stores and we believe our inventory position will be appropriate to meet our goals this Holiday season. We continue to be pleased with the customer response to our new merchandise assortments, which we believe will drive market share gains this Holiday.”

JCK