Terry Burman Goes to the Other Side

If nothing else, the news that former Signet CEO Terry Burman is joining Zale will ensure that there will be plenty to talk about at the Las Vegas show. Burman, who retired from Sterling after amassing one of the most impressive records in the history of jewelry retail, won’t be involved with the company on a day-to-day basis; he will simply be, as the company keeps stressing, an “independent chair.” Zale CEO Theo Killion implied on the post-earnings conference call that the company doesn’t plan radical changes:

“I fully expect that there will be a long process of [Burman] understanding our business. And we’re going to continue to execute the plan that we’ve been executing that delivered the 10th straight positive comp quarter. So we look forward to him adding to the dialogue at the board level. But as we sit here today, we’re going to execute our plan.” 

Still, one figures they will be picking Burman’s brain quite a bit. Otherwise, why bring him on?

For all the strides it’s made—and it’s made quite a few—Zale has always had a lack of retail jewelry experience in its higher echelons, especially compared to its competitors. With Burman aboard, the company now has access to someone who knows mass-market jewelry retail as well as anyone. “This gives them a lot more industry credibility,” said one vendor. (It also helps them with Wall Street—the stock had a nice jump following the announcement.) And that credibility might mean that Zale could have greater access to vendors and top talent. One manufacturer told me he hopes that Burman will help Zales define its brand identity, as he did with Kay and Jared. Others hope he will urge improvements in training at the store level.

All good things. But what does this mean to Signet? This move would seem to be a blow to it; Zale now has a high-ranking exec who knows all its secrets. (It has also given new life to the age-old talk that one day the two will merge.) But Zale isn’t really in a position to seriously challenge Sterling right now, and in many ways, the whole paradigm is outdated anyway. When Burman ran Signet, he was a fierce competitor, denying Zale any chance to get a leg up. Even today, the two are battling each other in court. “If you work for Zale, you are always going to hate Sterling, and vice versa,” says one former Zale employee.

Yet if the recent recession taught us anything, it’s that the big jewelry chains have a lot more to worry about than just each other. They are no longer fighting just for a piece of the jewelry pie, but with other industries for the share of the consumer dollar. One of the reasons why the two retailers’ proprietary brands have worked so well is they bring new customers into the store and differentiate the companies from the sameness that you see in so many jewelers. 

Which might be why the vendors I spoke to see this as not only a positive step for Zale, but for the industry as a whole. “I’m sure Signet’s not happy,” one told me. “But really, this helps everyone. A stronger Zale will mean an even better Kay.”

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JCK News Director

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