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  • Has Zale's Stock Fallen Enough to Represent Fair Value? [View article]
    The bear case on ZLC: In a recession, discretionary purchases like jewelry will suffer particularly badly. And the low end of the market is the most squeezed, because real wages aren't rising, gas prices are at an all time high, and when China allows the Yuan to appreciate, the price of everything in Wal-mart will go up.

    Not a pretty picture for a low-end jewelry vendor like ZLC. In other words, "the core mall business" as these guys call it will be horrible.

    Add to that the Internet: there's growing acceptance of purchasing engagement rings online, and ZLC is badly trailing Ice.com and Blue Nile in online diamond sales.

    Full Disclosure: I'm short ZLC for these reasons.
    Jan 03 10:21 am |Rating: 0 0
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