Zale Corp. announced Monday that the Securities and Exchange Commission has 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. Subpoenas issued in connection with the investigation request 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 Dallas-based company in a statement said it believes that its accounting comply with generally accepted accounting principles and is reviewing the matter. The company said it will cooperate fully with the SEC’s investigation.

Zale Corp. is North America’s largest specialty retailer of fine jewelry operating approximately 2,345 retail locations throughout the United States, Canada, and Puerto Rico, as well as online. Zale Corporation’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.

JCK