Shop Talk

Retailers, consumers and prices

Check Out Line: A glimmer from Zale’s

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Check out who is paying full price for bling.  ZALE/

More people at Zale Corp, that’s who.

The jeweler still posted a loss in the first quarter, but it was less of a loss than a year earlier.

Merchandise margins also rose, the result of less promotional
price cutting.

Zale has also cut expenses, closed stores and trimmed inventories. And it got some relief from its liquidity problems earlier this month, when private equity firm Golden Gate Capital lent it $150 million for five years and took a 19.9 percent stake.

Are Zale’s shares, priced at under $3, starting to dazzle? Well, any stock move today could be exaggerated by traders covering short positions.

As of April 30, about 14 percent of Zale shares were held short by investors betting the price would fall. That is far above the 3.5 percent average for New York Stock Exchange-listed stocks.

Check Out Line: Diamonds no longer a girl’s best friend?

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tiffany1Check out the quarterly results at jeweler Tiffany & Co. It’s enough to make one question  Marilyn Monroe’s choice in songs.

The company posted a slightly weaker-than-expected first-quarter profit and said sales dropped 22 percent as shoppers avoided jewelry. Companies like Tiffany and even more-affordable peers such as Zale Corp have seen demand hurt in the past year as consumers focus on buying necessities in the recession.

Check Out Line: The discretionary downtown

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sksCheck out the effect of splurge-resistant shoppers on quarterly results.

With newly frugal shoppers sticking to newly shrunk budgets, Saks posted a quarterly loss that was much steeper than Wall Street expected, and said same-store sales in its fourth quarter fell 15.3 percent.

“During the quarter, the company experienced continued weakness across all geographies, merchandise categories, and channels of distribution,” said Chairman Stephen Sadove.

Check Out Line: Fewer analysts = shorter calls

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Check Out those quick corporate conference calls.

Anyone who listens to earnings conference calls (we at Reuters Shop Talk listen to dozens each quarter) knows they can drag on … and on … and on.

But these days, some companies have less to say since they’re not giving guidance or they are keeping mum on their plans in this shrinking economy.  Plus, with banks cutting jobs or closing down like Bear Stearns, there are fewer analysts around to ask questions at the end of the calls.

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