Zale Corp. disclosed the forced resignations of its chief executive and two other top executives Wednesday, one day after rival Signet Jewelers Ltd. released figures showing it far outshined in holiday sales.
The shakeup comes after several quarters of poor performance at Zale, of Irving, Texas. "It was clear somebody was selling jewelry this Christmas and it wasn't us," Chief Financial Officer Matt Appel, said in an interview.
The departures of Chief Executive Neal Goldberg, William Acevedo, head of stores, and Mary Kwan, chief merchandising officer, followed misguided merchandising and marketing decisions, according to suppliers. The executives could not be reached for comment.
Last week, Zale reported that sales at stores open at least a year fell 12% in November and December, the period that accounts for more than 35% of its yearly revenue. In contrast, comparative-store U.S. sales at Signet, which owns Kay Jewelers and Jared the Galleria of Jewelry, rose 7.6%.
Mr. Appel added that the board "felt strongly it needed the right, new management team to return the company to profitability by focusing on our core mission—selling diamonds." Board Chairman John B. Lowe Jr. did not immediately respond to requests for comment.
The terms of Mr. Goldberg's severance have not been worked out yet, according to Mr. Appel. Mr. Goldberg's contract calls for him to receive two years salary, or a little more than $2 million. Zale President Theo Killion was named interim chief executive.
Mr. Goldberg—the company's sixth chief executive in 10 years—earlier this year pledged his new merchandise strategy would help turnaround the struggling chain. Helaid out a plan to sell moderately priced heart-shaped diamond jewelry, fashionable watches and a new line of pricey bridal diamonds.
He moved a substantial amount of advertising to the Internet from television, and increased the proportion of part-time workers.
But in late November, Mr. Goldberg, 50, told investors the company was "cautiously optimistic" about holiday sales. But just 10 days later, it was clear many of Mr. Goldberg's decisions weren't working. Zale disclosed November sales at stores open more than a year fell almost 19%, continuing the double-digit declines of its last three fiscal quarters. In December, the retailer cancelled tens of millions of dollars in merchandise orders and began paying suppliers late.
Shares fell 8% to $2.97 in late trading Wednesday, after gaining 8 cents at 4 p.m. on the New York Stock Exchange.
The owner of Zales Jewelers and Gordon's Jewelers posted losses in seven of the last eight quarters. The Securities and Exchange Commission in October began a probe after Zale restated earnings for two years.
Mr. Killion, a former executive at Limited Brands Inc. and Macy's Inc., joined Zale in January 2008.
Write to Ann Zimmerman at ann.zimmerman@dowjones.com
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