Citibank Extends Zale Deadline by a Month, Continue Negotiations

Citibank gave Zale until May 31 to pay a $6 million penalty fee, providing the embattled jeweler with an extra 31 days to make the payment. This is the second extension Zale got from Citibank to pay the charge. The sides are currently negotiating a new buyers credit agreement.

After falling below the minimum level of credit sales required by their agreement, Citibank notified Zale that it would terminate the merchant services agreement unless Zale paid Citibank approximately $6 million by April 1, 2010. Citibank later agreed to extend the deadline to April 30.

Zale said that they have entered into negotiations with Citibank for a replacement for the agreement, adding that “in connection with the most recent extension,” Zale agreed to negotiate exclusively with Citibank at this stage.