Zale joins the growing list of retailers undergoing cut backs. The chain says it will shut 115 stores "when the leases mature." At least that's better than the firm trying to get out of long-term leases. They intend to meet existing obligations and just pass on renewals.
The net loss was $23.6 million, or 74 cents per share, in the fiscal second quarter, ended Jan. 31, compared with a net earnings of $60.8 million, or $1.34 per share, a year earlier.
Adjusted for special items, profit came to 16 cents a share in the latest period, compared with 48 cents a share expected by analysts on average, according to Reuters Estimates.
Sales dropped 17.9 percent to $679.4 million, while same-store sales fell 18.1 percent as consumers cut back on discretionary purchases in the recession.
Gross margin shrank to 44 percent of revenue from 49.3 percent a year earlier, hurt by aggressive discounting.
Zale withdrew its full-year outlook in November, and at that time, its CEO said the 2008 holiday season could be "one of the most challenging in decades."
Bankruptcies and Liquidations:
- Jan. 7, Goody's liquidates, closing 287 stores
- Jan. 8, Against All Odds files for bankruptcy protection, operates 64 stores overall, plans to close West Coast stores
- Jan. 13, Shane Co. files for bankruptcy, operates 23 stores
- Jan. 14, Gottschalks files for bankruptcy, operates 58 stores
- Jan. 16, Circuit City to Liquidate, closing 567 stores
- Feb. 6, Fortunoff, operates 20 stores
- Feb. 6, Bruno's, operates 66 stores
- Feb. 12, S&K Famous Brands, operates 136 stores; Update: Feb. 19, plans to close 30.
- Feb. 17, Innovation Luggage, operates 10 stores
- Feb. 23, Ritz Camera, operates about 1,000 stores
Potential Bankruptcies & Liquidation Impact: 884 confirmed closures out of about 2,231 stores
- Jan. 8, New York & Co., 50 stores
- Jan. 8, Macy's, 11 stores
- Jan. 9, Supervalu, 50 stores
- Jan. 13, Cost Plus, 26 stores
- Jan. 20, Yankee Candle, 28 Illuminations stores
- Jan. 21, Filene's Basement, 11 stores
- Jan. 22, Phillips-Van Heusen, 175 stores
- Jan 22, Brown Shoe, up to 35 Famous Footwear stores
- Jan. 26, Home Depot, 48 stores
- Jan. 29, Starbucks, 200 U.S. Stores (plus 100 international)
- Jan. 29, Chico's, up to 25 stores
- Feb. 9, Talbots, 20 stores
- Feb. 24, Jimmy'Z, 11 stores
- Feb. 24, Z. Gallerie, 25 stores
- Feb. 25, Zale Corp., 115 stores
Total Closings: up to 830 U.S. stores
Potential Impact of All Announcements to Date: 1,714 closures out of up to 3,061 potentially affected U.S. stores