Diamond veteran Zale mulling refinancing
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22.02.10, 10:09
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Retail
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Diamond retailer Zale Corp is trying to combat its growing cashflow problems, fueled by fumbling holiday sales, by taking what the Dallas News is calling “unusual steps.”
Current and former insiders of the Irving-based chain told the newspaper that strong leadership and money can probably solve Zale’s problems. Zale has been reigning supreme over the diamond jewelry industry for 85 years, noted the report.
"The jewelry industry needs Zale," Beryl Raff, chief executive of Helzberg Diamonds and a former Zale CEO, told the newspaper. "It's not exactly a robust industry. When an important player struggles, it impacts everyone. It's bigger than Zale Corp."
The US jewelry and watch market, added the report, shrunk significantly in the last two years, dropping from $61.6 billion in sales in 2007 to $59 billion in 2009. Zale has recently hired New York-based investment banking firm Peter J. Solomon Co. in order to devise a refinancing plan. Zale has reported losses in eight of the last nine quarters.
It's not clear how much money Zale needs, but industry experts estimate a figure of about $100 million.
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