Zale Surges on Apollo Bid
NEW YORK (
) --
Zale
(ZLC)
is surging Tuesday morning after reports surfaced that a private-equity group plans to purchase a stake in the jeweler.
The news sent shares surging 24% to $2.49 in morning trading.
The Wall Street Journal
reported that Apollo Management submitted a proposal to buy a stake in the fledgling company. It is one of several proposals submitted to Zale since the company hired investment bank Peter J. Solomon to advise on its strategic options.
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Apollo would bring on its own management team if the proposal passes, the
Journal
said, citing sources familiar with the matter.
Last month the company announced the resignation of some of its top executives, including CEO Neal Goldberg, Chief Stores Officer William Acevedo and Chief Merchandising officer Mark Kwan. Currently, President Theo Killiom is also serving as interim CEO, while Gil Hollander, executive vice president and chief sourcing and supply chain officer, assumed the role of chief merchandising officer.
The news came as Zale's sales took a hit in the all-important holiday season, tumbling 12%. Weak sales prompted Zale to cancel orders in November and, according to reports, the jeweler even asked its diamond merchants and other vendors to buy back old merchandise in exchange for a promise of future orders.
-- Reported by Jeanine Poggi in New York.
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