Zale Cancels Orders As Debt Mounts

Zale Corp. has cancelled some orders with suppliers as it struggles to cope with its increasing debt and significant decline in sales, the Wall Street Journal reported Friday.

The company recently reported that its total sales were down 9.6 percent and same-store sales had fallen by 6.8 percent.

During November, a month which has typically represented approximately 25 percent of Zale’s total revenues for the second quarter, Zale reported an 18.6 percent drop in comparable store sales.

Matt Appel, Zale's chief financial officer, told the Journal while Zale has cancelled some orders, it has cash on hand to pay suppliers.

"Barring something catastrophic, we will pay our bills," Appel said.

IDEX Online analyst Ken Gassman said the November sales represented "a worrisome number.”

“I scratch my head and wonder what will change in December to make things better and I can't think of anything," Gassman said.