Zales Left Unloved By November Holiday Sales

Posted by Abe Sauer on December 9, 2009 09:50 AM

Zales, the mall-based jewelry stalwart, is in trouble.

The brand just reported that same-store sales slipped more than 18 percent in November. Since a quarter of all Zales revenue comes from November holiday sales, this presents a daunting reality for the brand. So... what happened?

Nothing. And that's the problem.

The jewelry brand is doing what it's always done; that is to say, inundate man-type programming like football with Zales ads that instruct men on what to get the better half for the holidays. Yet that strategy doesn't seem to be working in these tough economic times where both men and women are finding more affordable ways to express themselves.

But there is some good news for the jewelry brand. Analysts speculate there will be at least an increase of 1.5 percent in same-store sales for Zales on account of hundreds of mom-and-pop jewelers having gone out of business over the last year.

The good news, however, ends there. Zales is currently in an investigatory kerfuffle with the Securities and Exchange Commission about the results the retailer stated for fiscal 2008 and 2009. If Zales doesn't do something to revive its sales numbers, competitor brands like (Signet's) H.Samuel and Jared -- which has been advertising heavily also -- will certainly step in and eat its lunch.

Perhaps Zales should consider focusing on golf more than football, as the brand received an unexpected endorsement from Tiger Woods, who, it is rumored, said he needed to "go to Zales for the Kobe Bryant special."

More about: Luxury, Zales, Signet, H. Samuel, Jared, Tiger Woods, Kobe Bryant

Al Haberstroh says:

It is not like Zales could not have seen this coming. With value being the primary sales driver in 2009 they should have adjusted their creative to a strong value message. And, yes, it might help if they adjusted their target audience as well. Doing what you have always done as the market changes is a recipe for failure. Zales, Abercrombie and many other retailers I can think of somehow thought not changing when consumer attitudes were changing was good strategy. If Zales Nov. sales are reflective of the overall drop in the jewelery market then their strategy has not gained market share which should have been their goal. If their sales decreases are greater then that of the overall jewelery market, then their competitors are already eating their lunch.

December 10, 2009 09:25 AM #

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