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New CEO for Jewelry Chain

September 8, 1999

DALLAS (AP) _ Beryl Raff, president and chief operating officer of Zale Corp. since July 1998, will succeed Robert J. DiNicola as chief executive of the jewelry chain.

DiNicola will remain as chairman of the company, a once-struggling jewelry retailer that he rebuilt into an industry powerhouse over the past five years.

Ms. Raff, 47, has handled day-to-day operations at the company’s store lines for the past 13 months. She was an executive at Emporium and Macy’s before becoming president of the Zale’s Jewelers division in 1994.

``Her knowledge of the jewelry industry is second to none,″ said Steve Kernkraut, an analyst with Bear Stearns. ``I think it’s a status quo (succession) ... The format is set, the game plan is set, it’s just a matter of execution.″

Ms. Raff joins Rose Marie Bravo at British luxury clothier Burberry among the handful of female CEOs of big retailers. Computer maker Hewlett-Packard made headlines earlier this year by naming a woman, Carleton Fiorina, as its president and chief executive.

Zale operates about 1,330 retail jewelry stores, including its namesake chain, plus Gordon’s Jewelers, Bailey Banks & Biddle Fine Jewelers and Peoples Jewellers.

Zale is celebrating its 75th anniversary this year, but its history hasn’t been all rosy. The company grew to 1,800 stores in the 1980s. Heavy debt pushed it into bankruptcy in 1992 and forced the closure of 700 stores. The company emerged 18 months later lacking focus.

DiNicola, 51, turned the company around by changing the mix of merchandise and pushing for an aggressive approach to inventory management, getting rid of the items that didn’t sell and concentrating on the top-movers.

Analysts said DiNicola’s decision to give up the CEO’s title he has held since April 1994 was surprising but didn’t signal changes at the company.

``Bob DiNicola is still going to be looking at the macro issues for the company,″ said Richard Zimmerman of Janney Montgomery Scott. ``I think it’s more a passing-down of the torch ... to an incredible merchandising person.″

The company on Tuesday reported better than expected earnings for its fiscal fourth quarter.

Zale said earned $8.5 million, or 23 cents a share, for the quarter ended July 31. That compared with $7.5 million, or 20 cents a share, in the same quarter a year ago.

Sales for the quarter were $326 million, up from $280.8 million a year ago. Comparable-store sales _ which includes sales only at stores open at least a year _ rose 6 percent.

For the year ended July 31, Zale earned $81 million, or $2.21 a share, compared with $68.9 million, or $1.84 a share, a year ago. Sales were $1.43 billion, up from $1.31 billion a year ago.

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