Zale Corp. names new executive
DALLAS (AP) – Jewelry retailer Zale Corp., which has finally begun showing signs of recovery from a disastrous 2000 holiday season, said Monday it would promote its top merchandise official, Mary L. Forte, to chief executive on Aug. 1. Forte, 51, will replace Robert J. DiNicola, 54, who will remain chairman. DiNicola had stepped down as chief executive in 1999 but returned last year when his hand-picked successor resigned amid falling sales.
Forte is a 26-year veteran of the retail industry who had worked at QVC and Federated Department Stores before joining Zale – the largest U.S. specialty jewelry retailer – in 1994 as president of its Gordon’s Jewelers chain. She was promoted to executive vice president and chief administrative officer in 1998, and to chief merchandise officer in February 2001.
Company officials credit her with upgrading Gordon’s image with higher-quality products and better promotional campaigns, which led to higher average purchases and sales per store.
In an interview, Forte said the company would continue to be conservative in inventory and store expansion for the upcoming holiday season and the next two years because of uncertainty over the economy and world events.
Forte said her goal is to create strong, separate identities for the company’s 2,300 stores, which include mass-market mall merchant Zale’s, high-end Bailey Banks & Biddle Fine Jewelers, and Gordon’s Jewelers, which falls between those two.
“We’ve confused the issue by meshing the brands together and having everything be more like Zale than their own appropriate culture and brand and identity … we certainly confused the consumer,” she said.
“In the last 18 months we’ve been pulling that apart and giving each brand its own identity back.”
Forte acknowledged that some investors may compare her ascendancy to the naming of another insider, Beryl Raff, to lead the company in 1999. That succession plan failed, as Raff left the company in February 2001 after the retailer based in Irving near Dallas posted dismal results for the 2000 holiday season.
“I understand it. I’m not taking it personally,” Forte said of any investor reservations. “There is that overhang there. If I were them, I would probably feel the same way. I have to explain who I am, and the business and actions and numbers will speak for themselves.”
Forte said she would travel to New York in mid-July to meet the investment community.
Richard Marcus, head of the board’s search committee, said the selection of Forte would assure a smooth transition and continuation of Zale’s current strategy.
Zale shares fell 10 percent when DiNicola announced in March that he would step down as CEO, saying the company is regaining its footing.
In afternoon trading Monday, Zale shares were down 35 cents to $38.05 on the New York Stock Exchange.
In the quarter ended April 30, same-store sales rose 4.7 percent from a year earlier, revenue increased 6.3 percent to $444 million, and net income grew to $7.7 million from $3.3 million.
While economic indicators remain mixed, company officials say an uptick in sales at Bailey Banks & Biddle this spring gives them hope that consumers are feeling more confident about buying jewelry.
William Armstrong, an analyst for C.L. King & Associates, said the company had strayed from its core bridal business into fashion jewelry under Raff but has gone back to basics in the past 18 months.
“Mary is coming in with a tail wind,” Armstrong said. “They’ve got the brands where they need to be. It’s mainly execution now.”
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