What Will Happen To Zales?
The Dallas Morning News reports that Zales, the largest United States jewelry chain’s stock price has fallen more than 12 percent since Thanksgiving, as Wall Street expresses concerns about the Irving, TX-based company’s shrinking market share. The company has lowered sales and profit expectations in recent months and has admitted that it has lost market share to Kay Jewelers. Since reaching its split-adjusted high of $34.50 in July, Zale stock has fallen more than 25 percent, closing December 27 at $25.28, down 47-cents. After disappointing results for Christmas 2004, the company shuffled management at Zales Jewelers, which makes up 45 percent of Zale Corp.’s sales. But a year later, the chain is still stumbling. In a shift in direction, Zales is getting away from its “price-driven strategy” and emphasizing “a more style and quality image,” said David Sternblitz, Zale vice president and treasurer. The chain is buying basic jewelry directly from overseas sources, bypassing traditional
