Shares of staggering diamond retailer Zale ($ZLC) are up 10 cents, or 3%, in after-hours trading at $3.10 after the firm reported this afternoon it got $150 million five-year senior secured term loan from private equity firm Golden Gate Capital. Golden also took warrants to purchase up to 25% of the company’s common stock.
“With the completion of our financial restructuring, we will now be able to focus 100% of our time on key merchandising, in-store and marketing initiatives to grow sales and return to profitability,” said CEO Theo Killion.
With strong financing and a keen focus on profitability we will continue to add to our position and buy on the dips. This one should make a nice move moving into the wedding season starting middle of year. Last time we called it in February from $2.78 it rallied to nearly $4 so make sure you don’t miss this run.
Zale in late February reported revenue down 14%, year over year, but still managed to beat analysts’ estimates, delivering its first quarterly profit in two years.