DALLAS--(BUSINESS WIRE)--Zale Corporation (NYSE: ZLC) today announced that it has selected Citibank (South Dakota), N.A. (“Citi”) to provide the private label credit card program for the retailer’s Zales, Zales Outlet and Gordon’s brands in the United States, effective October 1, 2010.
The agreement is for a term of five years with automatic renewals for successive two-year terms and replaces the Company’s agreement with Citi which was scheduled to expire in March 2011. In connection with the agreement, payment of the merchant fee differential, due September 22, 2010, will no longer be required. Under the new agreement, the yearly minimum volume of net credit card sales has been reduced from $600 million to $315 million. Additionally, Citi will provide financial support of the Company’s marketing activities during the initial five-year term of the contract.
“We are very pleased to extend our ten year relationship with Citi,” said Matt Appel, Executive Vice President and Chief Financial Officer of Zale Corporation. “Citi has earned our business through their strong support in a very difficult consumer credit environment. In addition, by electing to go with Citi, there will be no transition impact to our business during the critical holiday season.”
“We are proud of our ten year partnership with Zale and look forward to continuing to provide customers with unparalleled service and unique credit products that build long-term loyalty and sales for Zale,” said Craig Vallorano, Executive Vice President, Citi Retail Partner Cards. “The program continues to offer significant value and a best in class in-store customer experience.”
During the selection process, Zale Corporation was advised by First Annapolis, a management consulting and M&A advisory firm, with a focus on the financial services industry and a specialty in payment-related products, services and delivery.
About Zale Corporation
Zale Corporation is a leading specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. 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, www.zalesoutlet.com, www.gordonsjewelers.com and www.pagoda.com. Additional information on Zale Corporation and its brands is available at www.zalecorp.com.