Giving Away the Store???
From MarketWatch in February:
Zale Corp. plans actions to save about $65 million a year, including eliminating 20% of its headquarters staff, or 140 filled and 85 open positions. The Dallas jewelry company said it plans to close 23 stores in fiscal 2008, bring the total to 105 closed stores for the fiscal year ending July 31.
From MarketWatch this morning:
Zale Corp.'s fiscal third-quarter same-store sales, or sales at stores open at least one year, rose 5.8% from a year earlier. Revenue for the Dallas fine jewelry retailer grew 6.3% to $477 million in the quarter ended April 30 from $449 million a year ago, helped by an "aggressive" clearance strategy. Zale expects a third-quarter loss from continuing operations of 40 cents to 45 cents a share. The company results of Bailey Banks & Biddle, which was sold in November, have been excluded from the results for both the current and comparable periods.
You close 15% of your underperforming stores and "aggressively" price merchendise at the remaining stronger performing stores and what do you think same store sales will do? Now profits is another matter, and the results show it.
Yippeee, sales are up giving away merchendise....who cares about profits.