Zale Announces Success in Rent Relief Negotiations for Jewelry Stores
Only one day following the bankruptcy of Finlay, the jewelry chain that bought Bailey Banks & Biddle from Zale Corporation less than two years ago, Zale announced a “real estate realignment” plan, which involved completing the closure of 118 stores by July 31, bringing its total closures in 2009 to 160 underperforming stores and 31 underperforming mall kiosk locations. Consequently, Zale now operates 1,931 retail locations in the U.S., Canada, and Puerto Rico, representing a net decrease of 269 stores since the recession started. The retailer’s store banners include Zales, Gordon's, and Piercing Pagoda in the U.S. and Peoples and Mappins stores in Canada.
Zale says it has been successful in negotiating rent relief with landlords on several stores, which will reduce its aggregate rental obligations in 2010. Landlords have agreed to settle $29 million in contingent rent obligations that Zale maintained on 34 of 45 Bailey Banks & Biddle stores; the retailer still anticipates settling on $33 million in obligations associated with the remaining 11 stores.