July 9th, 2007

Motley Fool considers Texas-based Zales stock to be undervalued by 30%

Zales purchase After suffering some setbacks, the Motley Fool thinks that Texas-based Zales might be in store for a turnaround:

Its brands include Zales Jewelers, Gordon’s Jewelers, Bailey Banks & Biddle, Peoples Jewellers, and Mappins Jewellers. A couple years ago, Zales committed the cardinal sin of retailing and forgot who its core customer was. The company tried going upscale, which is kind of like Tiffany (NYSE: TIF) trying to sell to the masses — obviously a mistake. Luckily, there’s still a lot to like at Zale. The company has a strong distributional presence, with stores across the country. Zale also might benefit from a revamped management team. In 2006, board member Betsy Burton, who has a reputation as a turnaround specialist, became the CEO.

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Photo Credits: a.simone

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