109156--9/26/2008--ZALE

related topics

{customer, product, revenue}

{acquisition, growth, future}

{capital, credit, financial}

{competitive, industry, competition}

{gas, price, oil}

If the general economy performs poorly, discretionary spending on goods that are, or are perceived to be "luxuries" may not grow and may even decrease. The concentration of a substantial portion of our sales in three relatively brief selling periods means that our performance is more susceptible to disruptions. Most of our sales are of products that include diamonds, precious metals and other commodities. Fluctuations in the availability and pricing of commodities could impact our ability to obtain and produce products at favorable prices, and consumer awareness regarding the issue of "conflict diamonds" may affect consumer demand for diamonds. Our sales are dependent upon mall traffic. We operate in a highly competitive and fragmented industry. Any failure by us to manage our inventory effectively will negatively impact sales and earnings. Because of our dependence upon a small concentrated number of landlords for a substantial number of our locations, any significant erosion of our relationships with those landlords would negatively impact our ability to obtain and retain store locations. Changes in regulatory requirements relating to the extension of credit may increase the cost of or adversely affect our operations. Any disruption in, or changes to, our private label credit card arrangement with Citibank, N.A. may adversely affect our ability to provide consumer credit and write credit insurance. Acquisitions and dispositions involve special risk, including the risk that we may not be able to complete proposed acquisitions or dispositions or that such transactions may not be beneficial to us.

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109156--9/26/2008--ZALE_CORP