Citibank is cutting off Zale’s credit cards.

Citibank recently gave Zale notice that it does not plan to renew its agreement to finance Zale’s private label credit cards.

The two parties’ "Merchant Service Agreement" expires in March 2011.

A Zale statement said it "has initiated discussions with Citibank and other parties with respect to customer financing arrangements to replace the Agreement when it expires."

In related news, Zale is denying reports that it has retained investment bank Rothschild for help on restructuring plans.

JCK