Market Developments
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Goldberg out as Zale announces executive shakeup
By Michelle Graff
January 14, 2010
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| After dismal holiday results, Zale Corp. announced the departure of CEO Neal Goldberg, left, and said that company president Theo Killion, right, will step up as interim CEO. |
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Dallas--Less than a week after posting a same-store holiday sales decline of 12 percent, Zale Corp. has announced big changes at the top, including the immediate exit of Neal Goldberg, its chief executive officer.
Zale Corp. said its board of directors has appointed Theo Killion, company president, to the additional role of interim CEO, as Goldberg empties both his seat on the board and his CEO chair. Also leaving the company, effective immediately, are William Acevedo, chief stores officer, and Mary Kwan, chief merchandising officer, the release said.
In other changes, the company also announced that Gil Hollander, executive vice president and chief sourcing and supply chain officer, has assumed the additional role of chief merchandising officer, a change that will place all aspects of diamond sourcing and merchandising under Hollander's oversight.
Zale Vice President and Treasurer David Sternblitz confirmed Thursday that the changes were made in reaction to disappointment at the company's financial results.
"Company performance did not meet our expectations. The changes made yesterday were a result of that," Sternblitz said.
When asked if Hollander's assumption of this additional role is a permanent change, Sternblitz said, "This is the structure we intend to have in place," adding that Hollander's 35 years of experience in the jewelry business makes him a fit for the position.
"He knows the Zale customer, having been president of one of our brands as well as having headed up our sourcing organization" Sternblitz said. "Gil's extensive diamond experience and understanding of the quality/value proposition will be heavily utilized as we refocus on our core diamond business. As the head merchant for Piercing Pagoda, Gil has successfully run a business that has both a basic and fashion-merchandise component. We believe his skill set is well-suited for the position."
Killion joined Zale Corp. in January 2008 as executive vice president and was subsequently appointed company president in August 2008. Previously, Killion held senior management positions at Tommy Hilfiger, Limited Brands, Macy's East and the Home Shopping Network. He will assume initial responsibility for all store operations, the release said.
Hollander possesses more than 35 years of experience in the jewelry industry, and joined Zale in September 2000 with the acquisition of Piercing Pagoda. He has served in various senior management positions with the company.
Goldberg took the helm at Zale Corp. in late December 2007, replacing then president and CEO Betsy Burton, who stepped down days before Christmas.
A newcomer to jewelry retailing at the time, Goldberg had nearly 30 years of experience in the retail industry under his belt, including senior roles at Macy's, Victoria's Secret and Gap Inc. His previous position was president of The Children's Place retail stores, which sell children's clothing and accessories.
Acevedo, who started his career at Macy's before moving on to clothing retailer Banana Republic where he served as vice president of stores, started at Zale in April 2008.
Sternblitz said it is unknown at this time if the company will seek to replace Goldberg and Acevedo with jewelry veterans or industry outsiders.
"The board has not yet begun the process of searching for candidates. Therefore, it is too early to speculate on the recruiting strategy," he said.
As the news first broke, the chairman of Zale Corp.'s board described the executive restructuring as part of a plan to bring the long-struggling company back to profitability.
"Our board is determined to do all in its power to put in place effective leadership to help return the company to profitability," Zale Corp. Chairman John Lowe, Jr., said in a statement released late Wednesday afternoon. "At the same time, these management changes will help facilitate renewed focus on Zale's core diamond business. We are fortunate to have executives with Theo Killion's and Gil Hollander's experience to assume greater leadership responsibilities as we refocus on our core strengths."
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Market Developments
Franklin Resources Inc., one of Zale Corp.'s largest shareholders, is shedding its shares in the troubled company, according to news reports. Read More
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