According to an article in the Dallas Morning News, Zale Corp., a jewelry retailer has reported a net loss of $23.6 million and is implementing 245 job losses and closing 115 unprofitable stores. They are also cutting inventory in a effort to stop the bleeding and avoid bankruptcy. As we have mentioned several times on this blog, the retail sector is being hit by step sales declines and job losses forcing many to declare bankruptcy. Many jobs are concentrated in the retail industry and those job losses are causing major problems in other sectors such as commercial real estate which relies on revenue that retailers provide in the form of rent.

The article said:

Total revenue fell 18 percent to $679 million in the holiday quarter compared to $828 million a year ago. Same-store sales also decreased by 18 percent. Zale said it identified $175 million in inventory and cost reductions. About $34 million in expenses will be saved by closing 115 stores as leases mature through July 2010.

An 18 percent decrease in sales is a huge blow especially in retail where the profit margins are tight. And 115 store closing will add to the already battered commercial real estate market. We may see many more retailers suffer job losses, slash inventory and close stores as they edge closer to bankruptcy and fight to stay alive.