The United States Securities and Exchange Commission notified Zale Corp. that the investigation of the Dallas-based company has been terminated with no enforcement action being recommended.
“Although we are clearly focused on the business at hand, we are pleased to put this matter behind us,” Betsy Burton, Zale Corp. president and chief executive officer, said in a statement released Sunday. “I would like to thank our shareholders, customers and employees for continuing to demonstrate their confidence in our organization throughout this process. We remain deeply committed to adhering to the highest standards of corporate governance.”
Zale announced on April 10 that the SEC initiated a non-public investigation relating to various accounting and other matters related to the company, including accounting for extended service agreements, leases, and accrued payroll.
The company said subpoenas issued in connection with the investigation requested materials relating to these accounting matters as well as to executive compensation and severance, earnings guidance, stock trading, and the timing of certain vendor payments.
The company said at the time that it believed its accounting complied with generally accepted accounting principles.
In a related matter, Zale on Monday announced that it named Rodney Carter senior vice president and chief financial officer, effective Oct. 16. Carter will report to Burton.
Carter replaces George Mihalko who has served as acting acting chief administrative officer and CFO on May 5. Mihalko replaced Mark Lenz who was placed on indefinite administrative leave, following the disclosuer of the SEC investigation.
Carter is senior vice president and CFO of PETCO Animal Supplies, Inc., a leading specialty retailer with over 800 stores and annual revenues of $2 billion. Prior to joining PETCO in 2004, he was executive vice president and CFO of CEC Entertainment, Inc., the parent company of Chuck E. Cheese restaurants in the United States. Carter also spent 12 years with JC Penney Company, Inc., eventually becoming CFO of JC Penney Credit, a $4 billion division. He has more that 23 years of financial experience in the retail, restaurant/entertainment and financial services industries.
“We are very excited to have someone of Rodney’s caliber join our management team,” Burton said. “His high level of business acumen and extensive experience as CFO of public retail companies make him a great fit at Zale.”
Zale Corp. is North America’s largest specialty retailer of fine jewelry operating approximately 2,350 retail locations throughout the United States, Canada, and Puerto Rico, as well as online. Zale’s brands include Zales Jewelers, Zales Outlet, Gordon’s Jewelers, Bailey Banks & Biddle, Peoples Jewellers, Mappins Jewellers, and Piercing Pagoda. Through its ZLC Direct organization, Zale also operates online at www.zales.com and www.baileybanksandbiddle.com.