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Press release from Business Wire

Zale Announces New U.S. Private Label Credit Card Program Agreement with Alliance Data

Wednesday, July 10, 2013

Zale Announces New U.S. Private Label Credit Card Program Agreement with Alliance Data

07:30 EDT Wednesday, July 10, 2013

DALLAS (Business Wire) -- Zale Corporation (NYSE: ZLC) today announced it has signed a new, multi-year private label credit card program agreement with Alliance Data Systems Corporation (NYSE: ADS), a leading provider of loyalty and marketing solutions. Under the terms of the agreement, Alliance Data, through its Comenity Capital Bank (“CCB”) subsidiary, will provide private label credit cards to customers of Zale in the United States beginning no later than October 1, 2015, following the scheduled expiration of Zale's current U.S. private label credit card agreement on September 30, 2015. In addition, prior to October 1, 2015, CCB has the option to participate in certain special financing programs for Zale's customers in the United States.

Following the completion of program implementation during the first half of fiscal 2014, Zale will begin to receive benefit from Alliance Data's extensive marketing, analytical and technical services. For each of Zale's U.S. brands, Alliance Data will provide proven marketing and database capabilities, sophisticated analytics and a suite of omnichannel marketing tools designed to generate sales and extend brand affinity. Alliance Data will also provide a portfolio of innovative tablet and mobile marketing solutions for fine jewelry that are designed to optimize cardholder acquisition and retention. In addition, Zale will receive a commencement payment in July 2013 from CCB.

“We are very pleased to begin our partnership with Alliance Data,” said Matt Appel, chief administrative officer of Zale Corporation. “We selected Alliance Data for its extensive and highly regarded marketing tools and analytics, retail expertise, technology solutions and customer service. We will receive near-term benefits from these capabilities as well as significant economic benefits from this relationship over the life of the contract.”

The agreement has an initial term through the later of the seventh anniversary of the Alliance Data program commencement date or October 1, 2022, and automatically renews for successive two-year periods after the initial term in the absence of written notice by either party of non-renewal. If certain performance metrics are achieved within the first three years of the program, Alliance Data has the option to extend the initial term by two years.

Fiscal 2013 Fourth Quarter and Full Year Results

Zale Corporation plans to report fiscal 2013 fourth quarter and full year financial results on Wednesday, August 28, 2013, before the market opens. Zale will host a conference call at 9:00 a.m. ET the same day.

About Zale Corporation

Zale Corporation is a leading specialty retailer of diamond and other jewelry products in North America, operating approximately 1,710 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 webstores at www.zales.com, www.zalesoutlet.com, www.gordonsjewelers.com, www.peoplesjewellers.com and www.pagoda.com. Additional information on Zale Corporation and its brands is available at www.zalecorp.com.

This release may contain forward-looking statements, including statements regarding the services to be provided by Alliance Data and their impact. 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 decrease; Zale is dependent upon Alliance Data to provide the agreed-upon services; 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; if the Company does not achieve targeted sales growth its operating results and earnings will be adversely impacted; 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; the financing market remains difficult, and if we are unable to meet the financial commitments in our current financing arrangements it will be difficult to replace or restructure these arrangements; and changes in regulatory requirements may increase the cost or adversely affect the Company's operations and its ability to provide consumer credit and write credit insurance. 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, 2012, and subsequent reports on Forms 10-Q and 8-K. 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, except as required by law.

Zale Corporation
Roxane Barry, 972-580-4391
Director of Investor Relations

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