Zale to cut jobs in effort to improve profitability

DALLAS Zale today announced initiatives -- including the elimination of 225 filled and open headquarter positions -- designed to improve profitability and overall effectiveness. The company said the efforts are expected to generate more than $65 million in annualized savings beginning in its fourth quarter.

Other elements of the program include a reduction of planned capital spending from an expected $85 million in fiscal 2008 to approximately $45 million in fiscal 2009 and the closure of an additional 23 underperforming locations, bringing the total number of planned store closures to approximately 105 in fiscal 2008.

Zale said it anticipates the total program cost, including severance-related benefits, of less than $4 million pre-tax, will be incurred largely in the company’s fiscal third quarter ending April 30.

Zale president and ceo Neal Goldberg said, “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 we are announcing today follows an extensive review, and will enhance our operational effectiveness significantly. It 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.”