Zale Still Might Fail

On May 10, when Zale Corp. received $150 million in financing from Golden Gate Capital, execs proclaimed the 86-year-old jeweler’s turnaround.Yet in June, the retailer’s stock sank below $2; on July 7, it hit a 52-week low of $1.35. Later that month, research firm Audit Integrity said America’s second-largest jewelry seller was at high risk “of bankruptcy or severe financial distress.” AOL’s Dailyfinance quipped, “New money may defer the point at which Zales goes under, but it won’t prevent it.” (A Zale rep did not return JCK’s calls.)Along with Zale’s new backing comes high interest—15 percent a year, payable on a quarterly basis. “It’s not like they swapped out debt for equity,” says Michael O’Hara of Boston’s Consensus Advisors. “They swapped out debt for more debt.” Plus, its credit card woes continue; Citibank’s agreement to finance Zale’s b

This content is exclusive to JCK Pro subscribers. Subscribe now to access this and much more with discount code GOPRO21 for $199 for an entire year of access (reg. $249).


Already a JCK Pro? Log in

A JCK Pro subscription is your all-access pass to people and resources on the
cutting edge of the retail jewelry industry, from the industry authority you
know and trust

Learn about the Perks of JCK Pro

Log Out

Are you sure you want to log out?

CancelLog out