Report: Zale to sell stake to Golden Gate

Dallas Zale Corp. plans to sell a minority stake to Golden Gate Capital Corp., according to a Bloomberg report.

Golden Gate’s offer was selected over proposals from Centerbridge Capital Partners LLC and TPG. The companies will enter into exclusive talks, but the transaction may still fall apart, the report said.

Zale solicited capital earlier this year after sales and profit were hurt by a slump in spending on nonessentials during the recession. The retailer hired advisory firm Peter J. Solomon in February to help it get financing after determining its cash flow may not be sufficient for the year, according to a filing with the U.S. Securities and Exchange Commission last month.

Zale was seeking about $100 million to $150 million for the stake, the report said. Golden Gate’s retail investments include J. Jill Group and Eddie Bauer Holdings.