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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
ZALE CORPORATION ANNOUNCES DEFINITIVE AGREEMENT TO
ACQUIRE PIERCING PAGODA, INC.,
DALLAS, Texas, August 11, 2000 -- Zale Corporation (NYSE: ZLC), the
largest specialty retailer of fine jewelry in North America, and Piercing
Pagoda, Inc., (NASDAQ: PGDA), the largest specialty retailer of gold jewelry
operating through kiosks and traditional stores in the United States, today
announced that they have entered into a definitive agreement for Zale to acquire
Piercing Pagoda.
Under the terms of the agreement, a subsidiary of Zale will commence a
tender offer for all of the outstanding shares of Piercing Pagoda common stock
at $21.50 per share in cash. The tender offer will be subject to at least a
majority of the outstanding Piercing Pagoda shares, on a fully diluted basis,
being validly tendered and not withdrawn. The tender offer will also be subject
to regulatory approvals and other customary conditions.
"I am very excited about the opportunity to further our long term
strategic objectives with the purchase of Piercing Pagoda, the leader in the
kiosk segment," said Robert J. DiNicola, Chairman of the Board of Zale
Corporation. "This business is extremely synergistic with our existing portfolio
and this acquisition provides us yet another avenue to apply our retailing
skills for increased shareholder returns."
"This acquisition will extend Zale's `good, better, best' strategy to
capture the opening price point customer while still remaining focused on our
core competency of mall based operations," commented Beryl Raff, President and
CEO of Zale Corporation.
"We are very pleased with this transaction for both our shareholders
and our employees. Zale Corporation is clearly the leader in the jewelry
industry and has a proven track record of growing and expanding its brands.
Zale's merchandising and marketing expertise will allow Piercing Pagoda to
further maximize its potential in the marketplace," said Richard Penske,
Chairman of the Board and CEO of Piercing Pagoda, Inc.
Zale Corporation will host a conference call at 9:30a.m. today EST.
Parties interested in joining in on the call should phone 952-448-4698 today on
or after 9:30a.m. EST. For anyone unable to participate in the call, a replay
will be available until end of business on August 18, 2000. For further
information, contact Investor Relations.
-more-
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Zale Announces Agreement to
Acquire Piercing Pagoda, Inc.
Page Two
Piercing Pagoda currently operates over 940 stores in 44 states with 12
locations in Puerto Rico. The company primarily operates under the names
Piercing Pagoda, Plumb Gold, Silver & Gold Connection and Diamond Isle, and
offers an extensive selection of popular priced 14 and 10 karat gold chains,
charms, bracelets, rings and earrings, as well as a selection of silver and
diamond jewelry.
Zale Corporation operates approximately 1,390 specialty retail jewelry
stores located throughout the United States, Canada, Puerto Rico, and online,
including Zales Jewelers, Zales Outlet, Zale.com at www.zales.com, Gordon's
Jewelers, Bailey Banks & Biddle Fine Jewelers and Peoples Jewellers. Additional
information on Zale Corporation and its operations is available on the Internet
at www.zalecorp.com.
This release includes certain forward-looking statements, including
expectations for future revenue; growth in Zale's customer base on store
expansion arising from the acquisition of Piercing Pagoda, Inc. by Zale
Corporation, that are based upon management's beliefs as well as on assumptions
made by and data currently available to management. These forward-looking
statements are subject to a number of risks and uncertainties, including but not
limited to the following: the possible inability of Zale to complete the
acquisition of Piercing Pagoda, Inc., the risks and uncertainties associated
with the integrating of the two companies and retaining key personnel, and the
risk factors listed from time to time in the Company's Securities and Exchange
Commission reports, including but not limited to, its Annual Reports on Form
10-K. Actual results may differ materially from those anticipated in such
forward-looking statements. The Company undertakes no obligation to update or
revise any forward-looking statements to reflect subsequent events or
circumstances, even if subsequent events or circumstances make it clear that any
projected results expressed or implied therein may not be realized.
Piercing Pagoda shareholders are advised to read the tender offer
statement regarding the acquisition of Piercing Pagoda, referenced in this press
release, which will be filed by Jewelry Expansion Corp. and Zale with the U.S.
Securities and Exchange Commission and the related solicitation/recommendation
statement which will be filed by Piercing Pagoda with the Commission. The tender
offer statement (including an offer to purchase, letter of transmittal and
related tender offer documents) and the solicitation/recommendation statement
will contain important information which should be read carefully before any
decision is made with respect to the offer. These documents will be available at
no charge at the SEC's website at www.sec.gov.
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