Zale Next Retail Bankruptcy: Poll Predicts
NEW YORK (
) --
Zale
(ZLC)
is the most likely retailer to declare bankruptcy, according to the users of
TheStreet
.
The jeweler may need to seek bankruptcy protection by the end of the year, 44.6% of voters in our weekly poll said.
Earlier in the month, top executives, including its CEO, chief stores officer and chief merchandising officer, all resigned.
As the company looks for replacements, Zale President Theo Killiom will serve as interim CEO, while Gil Hollander, executive vice president and chief sourcing and supply chain officer, will also assume the role of chief merchandising officer.
The resignations came on the heels of a 12% plunge in sales in December, as the jeweler was forced to cancel orders ahead of the holiday season.
Zale was also the center of a Securities & Exchange investigation into financial irregularities in 2009.
Shares of Zale sank 7.2% to end the week at $2.18.
The next likely bankruptcy candidate, according to the poll, is
Blockbuster
(BBI) - Get Report
, with 33% of voters saying the company is in trouble.
Blockbuster tanked early last week after it reported that
fourth-quarter earnings came in significantly lower than expected due to weak holiday sales
.
As a result, the company now expects a loss between $183 million and $193 million.
Shares shed as much as half their value on the announcement, but began rallying on Thursday, after reports surfaced that rival
Movie Gallery
may
file for bankruptcy
as early as next week.
Blockbuster ended the week up 15% to 45 cents.
Borders
(BGP)
also took a few punches this week, first with the announcement that
CEO Ron Marshall is resigning from the company
, and then with reports that the company will eliminate 10% of its corporate staff.
Marshall is leaving Borders to head up
Great Atlantic & Pacific Tea Company
(GAP)
, better known as A&P, as
Borders posted a 14.6% plunge in holiday same-store sales
.
Borders has been facing some tough times as competition grows among discounters like
Amazon
(AMZN) - Get Report
and
Wal-Mart
(WMT) - Get Report
.
To combat the decline, Borders announced at the end of last year that it would shutter 182 Waldenbooks.
Now they will further cut costs by
eliminating 164 employees, or 10% of its corporate staff
.
About 14% of voters in our survey believed that Borders will file for bankruptcy in 2010.
Shares of Borders closed on Friday at 86 cents, 23% lower than last week.
Rite Aid
(RAD) - Get Report
, for its part, is said by our voters to be the least likely of the four to file for bankruptcy this year, with just 8% of the vote.
But things aren't all that rosy at the drugstore, either. The company posted a 2.1% drop in January same-store sales, with both its prescription and non-pharmacy business suffering.
Rite Aid announced that its pharmacy business was hurt by the introduction of new generic drugs. The drugstore filled 1.1% fewer prescriptions during the month.
Shares of the company closed the week down 7% to $1.36.
-- Reported by Jeanine Poggi in New York.
RELATED STORIES:
>>Blockbuster Stock on Downward Spiral
>>Market Missing Big Picture on Blockbuster?
>>Borders CEO Flees Crumbling Company
>>Borders to Cut 10% of Corporate Staff
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