Zale up on report it is deferring payment to Citibank
New York City Shares of Zale Corp. rose after the jewelry retailer said it has reached an agreement with Citigroup’s Citibank to defer a $6 million payment until May 31, the Associated Press reported.
The agreement was reported in documents filed with the Securities and Exchange Commission Monday. The deal was brokered Thursday, Zale said in the filing.
Zale owes Citibank $6 million as a penalty for a shortfall in credit sales. The fee was due at the end of March, but Citibank had extended it to the end of April. The latest agreement gives Zale more breathing room as it negotiates with the bank on a new credit-card arrangement.
The company has seen its sales tumble during the recession, hurt by tighter credit. Zale has closed hundreds of stores over the past two years. Its CEO and other executives left in January following a tough holiday season.
Zale is working with adviser Peter J. Solomon Co. on ways to improve its cash situation, including a possible sale of all or part of the company. It has reportedly been in talks with several private-equity firms, although Zale has not confirmed this.
Big Lots quarterly comps up 6%
COLUMBUS, Ohio Big Lots reported first-quarter retail sales increased 8.1% to $1.22 billion, compared with $1.13 billion for the first quarter of fiscal 2009. Comparable-store sales increased 6% for the first quarter of fiscal 2010.
Commenting on sales for the quarter, Steve Fishman, chairman, CEO, and president stated, “I am very pleased with our first quarter comp of 6% and the continued momentum we are seeing in our business. We delivered better quality merchandise at extreme values and the improvement in consumer discretionary spending trends, first recognized in the fall of 2009, continued through the first quarter of 2010. By offering a merchandising assortment that is highly discretionary in nature, we believe our business is uniquely positioned to benefit from an improving economy.”
A&P quarterly loss widens
MONTVALE, N.J. The Great Atlantic & Pacific Tea Co. reported that sales for the fourth quarter were $2 billion versus $2.3 billion in last year’s fourth quarter. Comparable-store sales decreased 4.8% during the comparable 12-week period.
A&P reported a net loss from continuing operations of $158 million which includes charges of $65 million for goodwill, trademark and long-lived asset impairment and income of $16 million for mark to market adjustments related to financial liabilities. Loss from continuing operations in last year’s fourth quarter totaled $84 million, and included income of $3 million for mark to market adjustments related to financial liabilities.
Ron Marshall, president and CEO, The Great Atlantic & Pacific Tea Co., said, “The past year was certainly a challenge, as the economy continued its sluggish pace. The good news is that we have identified several critical issues within our organization that will lead us back to market prominence. We are committing our undivided attention to clarifying our brand identity in our principal banners, completing the integration of the Pathmark acquisition and maximizing supply chain cost improvement opportunities.”