Zale Announces Increase of $100 Million in Stock Repurchase Program

DALLAS--(BUSINESS WIRE)--Zale Corporation (NYSE: ZLC), a leading specialty retailer of fine jewelry in North America, today announced that its Board of Directors has authorized an increase of $100 million as part of the Company’s stock repurchase program.

The new authorization is in addition to the $200 million repurchase authorization disclosed in November of 2007. As previously announced, the Company expects to retire approximately 11 million shares in total once the $200 million repurchase is complete. Currently, approximately $60 million is available under the previous authorization. The new authorization is expected to be executed through open market purchases, including through 10b5-1 plans and other means.

“As we have stated, the Company is committed to the generation of free cash flow through operational efficiencies, refinements in capital expenditures and a reduction in inventory levels. This additional authorization underscores Zale’s commitment to prudent uses of capital and is another step designed to generate value for shareholders over the long-term,” said Rodney Carter, Executive Vice President, Chief Administrative Officer and Chief Financial Officer.

About Zale Corporation

Zale Corporation is a leading specialty retailer of fine jewelry in North America, operating throughout the United States, Canada and Puerto Rico in 2,167 retail locations as of January 31, 2008. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at www.zales.com and www.gordonsjewelers.com. Additional information on Zale Corporation and its brands is available at www.zalecorp.com.

This release contains forward-looking statements, including statements regarding future share repurchases, future results of operations and cash flows and the strategies being implemented by the Company and their future success, including expense and capital reductions. Forward-looking statements are not guarantees of future performance and a variety of factors could cause the Company's actual results to differ materially from the results expressed in the forward-looking statements. These factors include, but are not limited to: if the general economy performs poorly, discretionary spending on goods that are, or are perceived to be, “luxuries” may not grow and may even decrease; the concentration of a substantial portion of the Company’s sales in three, relatively brief selling seasons means that the Company’s performance is more susceptible to disruptions; most of the Company’s sales are of products that include diamonds, precious metals and other commodities, and fluctuations in the availability and pricing of commodities could impact the Company’s ability to obtain and produce products at favorable prices; the Company’s sales are dependent upon mall traffic; the Company operates in a highly competitive industry; changes in regulatory requirements or in the Company’s private label credit card arrangement with Citi may increase the cost or adversely affect the Company’s operations and its ability to provide consumer credit and write credit insurance; acquisitions involve special risks, including the possibility that the Company may not be able to integrate acquisitions into its existing operations. For other factors, see the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended July 31, 2007. The Company disclaims any obligation to update or revise publicly or otherwise any forward-looking statements to reflect subsequent events, new information or future circumstances.