Zale Corp. announced Monday that Mary L. Forté, president, chief executive officer and member of the board, has resigned from the corporation, effective immediately. The board of directors appointed Betsy Burton, a “turnaround specialist,” and board member since 2003, as interim CEO until a successor is named. She becomes the fourth CEO since 2001 of Irving, Tex.-based company.
No explanation was given in the company statement for the surprise change in the top management of America’s largest specialty retailer of fine jewelry. The Dallas Morning News reported that Forte was asked to resign by the board “after a shift in strategy failed to translate into higher sales and profit.” Disappointing sales and earnings results for the past two fiscal quarters—which Forte herself blamed on problems caused by the ongoing repositioning of Zales Jewelers, its largest national chain—could heva been involved.
Zale Corp. had only a 0.9 percent increase in comparable store sales for the important holiday (November and December) season, far below what it expected. Total revenues, including 29 store closures, were $873 million, an increase of 1.4 percent. For the first quarter, ended Oct. 31, total revenues rose just 1.2 percent and the company posted a net loss of almost $24 million (including costs from closing about 30 Bailey Banks & Biddle stores). Comparable store sales were down 1.2 percent.
Forte, 55, who previously held top posts at QVC and Federated Stores’ Bon Marche and Rich’s divisions, joined Zale Corp. in 1994. She was one of just a few retail veterans then-chairman Robert J. DiNicola brought in to help rebuild Zale after it exited bankruptcy.
She began as president of Gordon’s Jewelers (which she repositioned, improving the merchandise mix and boosting per-store and average sales within two years). In 1998, she was named Zale Corp.’s executive vice president and chief administrative officer. She regained control over its operating expenses and improved its chains’ product quality, merchandise mix, customer service. In 2002, she was named CEO (and later president) of Zale Corp., and appointed to its board, succeeding DiNicola—who had returned as CEO and chairman in 2001, after Beryl Raff, his successor as CEO, abruptly resigned following disappointing sales results.
“The company would like to thank Mary for her many contributions over the last 11 years and we wish her well in her future endeavors,” said Richard C. Marcus, chairman of the board of directors. “We are very appreciative of the talent and energy she brought to the business.”
Burton, 54, has formerly served as CEO of various companies including Supercuts, Inc., PIP Printing, and the Cosmetic Center, Inc. Having gained a reputation as a turnaround specialist, she has most recently provided interim management and consulting services in the retail industry. Burton has served on the Zale board since 2003 and also sits on several other public company boards including Staples, Aeropostale, and Rent-A-Center.
“The board is committed to making sure we find the right leadership,” Marcus said. “We are pleased to have Betsy help lead this transition process as the Board conducts its internal and external search for a new CEO.”