Zale to Close 115 Underperforming Stores

Jewelry company Zale Corp. says it plans to close 115 underperforming stories and cut 245 jobs after posting a net loss for the second quarter of 2009, which ended January 31.

The company said it expects to save about $34 million in expenses through fiscal 2010 by closing about 115 underperforming stores, which will be closed as leases mature.
The company plans to slash $175 million from its budget through cost and inventory reductions, including the elimination of 245 jobs. Of those job cuts, 75 were unfilled positions, according to the company.

Dallas-based Zale Corp. posted a loss of $23.6 million, down from a profit of $60.8 million during the same quarter last year. The company attributes its loss partly to charges related to goodwill impairments and $5 million in expenses tied to store impairments.

Sales during the quarter hit $679 million, a 17.9 percent decline from $828 million the year-ago period.

Neal Goldberg, the company's CEO, said Zale's operating results were impacted negatively by the struggling economy, as well as a drop in gross margin
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