Zale to Close 105 Stores, Cut 200+ Jobs in Fiscal 2008
February 28, 08
American fine jewelry retailer Zale Corp announced Wednesday that it will close approximately 105 stores in fiscal 2008 and cut over 200 jobs. As part of an “operational efficiency program,” Zale plans to achieve with this move over $65 million in ongoing, annualized savings, beginning in the company’s fourth quarter of 2008.
Zale notes that one key element of the program will involve a reduction of its headquarters staff by 225 positions, or approximately 20 percent. The majority of the $65 million in annual savings will be achieved through cutting overhead costs.
The total anticipated cost of the program, including severance-related benefits, will be less than $4 million – to be incurred mostly in the third quarter ended
The retailer also noted that, as previously announced, inventory will be reduced by $100 million in 2008, a reduction the company intends to make permanent.
The program, Zale explains, is the product of management’s comprehensive review of operating and capital expenses in consultation with the board of directors.
Zale President and CEO Neal Goldberg commented, “In order to improve Zale’s overall performance and provide our value-oriented customer with an exceptional experience, it is essential that we reduce the company’s infrastructure costs, which have outpaced its sales growth since 2002.
“The program,” he continued, “builds upon steps we have already taken to reduce redundancies, simplify processes and create a more agile company, such as the realignment of our merchandise and sourcing organizations.”