Of the 105 closures, 90 are underperforming locations and 50 of them are kiosk shops. The units will close as leases expire, and management expects to end the fiscal year with 2,145 stores, down from its current 2,167.
Zale will reduce capital spending from $85 million in the current fiscal year to $45 million in next year's 12-month period. Additionally, the company is also eliminating 140 current and 85 open staff positions, or about 20% of its headquarters-based employees.
Due to these measures, executives are forecasting annualized savings of $65 million, $5 million of which will be realized in this fiscal period's fourth quarter.
In December, Zale named Neal Goldberg, a former Children's Place executive, president and chief executive officer. "We intend to make Zale into a more nimble and efficient organization," he said Feb. 21. We remain focused on the generation of free cash flow, achieving a high return on capital and maintaining financial rigor and discipline overall."
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