– While Zale made the last “interim” CEO permanent – until she left – most think that’s unlikely with the current “interim” CEO, Theo Killion. While I have heard from just about everyone that Killion is a good guy, his background is in human resources, not marketing or merchandising. He is widely perceived as a “placeholder” until a new CEO comes on board.
But no one is sure when that will be. Being CEO of Zale is a well-paying, prestigious job, but the company is clearly troubled, and the board is known for its short fuse, which could get shorter if circumstances get more dire. One assumes they will go for a CEO with jewelry experience this time, after the last two non-jewelry CEOs had mixed results. It’s interesting that a lot of the obvious candidates have already worked at Zale.
One more note: Richard Breeden, who controls about 28% of the company’s stock and is widely said to be running the show there, has a history of odd personnel choices – including installing a former McDonald’s exec at H. and R. Block.
– Speaking of Breeden, an unsettling aspect of all this is that the company is now being heavily influenced by a guy driven by his own interests – mainly the hundreds of millions he’s invested – rather than the company’s long-term future. He was widely seen as the force behind Zale’s recent stock buy-back, which sapped money that would have been better off invested in the company, and barely helped the stock. In addition, his presence makes it less likely that the company would ever file Chapter 11, even if needs to.
– It seems that, for as long as I’ve been closely following Zale (about the past five years), whenever a new CEO comes on board they badmouth the strategies under the prior management. And we could be seeing that again, as the company veers from Neal Goldberg’s more adventurous, fashion-oriented ideas to a “back to basics” approach. That’s applauded by my sources – not to mention commenters – but a lot of that “basics” business is now owned by Sterling, and it will take time for the company to re-establish itself in that space. And right now, time is something the company does not have endless amounts of.
– On a brighter note, the company has said it has made “substantial progress on its trade payables” — and that, along with these latest changes, has somewhat calmed down industry talk about its future. The latest mood is “wait and see.”