2009-11-14 14:01:04 -

Law Offices of Howard G. Smith, representing investors of Zale Corporation (“Zale” or the “Company”) (NYSE:ZLC), has filed a class action lawsuit in United States District Court on behalf of a class (the “Class”) consisting of all persons or entities who purchased the securities of Zale between November 16, 2006 and October 29, 2009, inclusive (the “Class Period”). The class action lawsuit was filed in the United States District Court for the Northern District of Texas.

The Complaint charges the Company and certain of its executive officers with violations of federal securities laws. Zale is a specialty retailer of fine jewelry in North America. The Complaint alleges that defendants knew or recklessly disregarded that their public statements concerning Zale’s business, operations

and prospects were materially false and misleading. Specifically, throughout the Class Period defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company improperly recorded certain advertising costs as prepaid advertising rather than recording the costs as an expense; (2) the Company improperly accounted for intercompany accounts receivable associated with its wholly owned insurance subsidiaries; (3) as a result, the Company's financial results were overstated during the Class Period; (4) the Company's financial results were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”); (5) the Company lacked adequate internal and financial controls; and (6), as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.

On October 29, 2009, the Company filed its Annual Report with the United States Securities and Exchange Commission (the "SEC") for the fiscal year ended July 31, 2009, containing restated financial information for fiscal 2008, 2009 and prior periods, to reflect certain accounting adjustments for advertising costs, intercompany accounts receivable, depository bank accounts, federal income taxes and personal property taxes. Zale further disclosed that the SEC is investigating the accounting issues that led the Company to restate its earnings for 2008 and 2009.

As a result of this news, shares of Zale declined $1.66 per share, or nearly 26%, to close on October 30, 2009, at $4.73 per share, on unusually heavy trading volume.

No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased Zale securities between November 16, 2006 and October 29, 2009, you have certain rights, and have until January 8, 2010, to move for lead plaintiff status. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215)638-4847, Toll-Free at (888)638-4847, by email to howardsmith@howardsmithlaw.com : mailto:howardsmith@howardsmithlaw.com or visit our website at www.howardsmithlaw.com : .



Law Offices of Howard G. SmithHoward G. Smith, Esquire215-638-4847888-638-4847 howardsmith@howardsmithlaw.com : mailto:howardsmith@howardsmithlaw.com www.howardsmithlaw.com :