Shareholder Class Action Filed Against Zale Corporation By The Law Firm of Schiffrin & Barroway, LLP

4 August 2006

The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:

Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of all securities purchasers of Zale Corporation (NYSE: ZLC) ("Zale" or the "Company") from February 18, 2005 to May 5, 2006, inclusive (the "Class Period").

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 Schiffrin & Barroway, LLP (Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll-free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.

The Complaint charges Zale and certain of its officers and directors with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company improperly timed vendor payments, thereby overstating its net cash flows and free operating cash flows; (2) that the Company skewed its true operational results by improperly accounting for extended service agreements, leases, and accrued payroll; (3) that the Company lacked adequate internal controls; (4) that the Company's financial statements were presented in violation of Generally Accepted Accounting Principles; and (5) that, as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.

On April 10, 2006, before the market opened, Zale shocked investors when it announced that the Company had received notice that the SEC was conducting a non-public investigation relating to various accounting and other matters related to the Company, including accounting for extended service agreements, leases, and accrued payroll. On this news, shares of Zale's stock dropped $2.64, or 9.5 percent, to close, on April 10, 2006, at $25.16 per share, on heavy trading volume. On May 5, 2006, after the market closed, Zale announced that defendant Mark R. Lenz ("Lenz"), the Company's Chief Financial Officer, had been placed on administrative leave. The Company reported that the decision was made after recent discussions with the Company's outside auditors that concerned Lenz's failure to timely disclose in conversations with the auditors that vendor payments scheduled to be made during the last two weeks of the Company's fiscal year ended July 2005 were delayed until the first week of August 2005, which was the start of a new fiscal year. On this news, shares of Zale's stock shed an additional $0.44, or 1.8 percent, to close, on May 8, 2006, at $24.18 per share. Zale's stock continued to fall the next day as investors absorbed the Company's announcement, losing $0.40, or 1.6 percent, to close, on May 9, 2006, at $23.78 per share.

Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com.

If you are a member of the class described above, you may, not later than September 18, 2006, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Schiffrin & Barroway, or other counsel of your choice, to serve as your counsel in this action.

CONTACT: Schiffrin & Barroway, LLP

Darren J. Check, Esq.

Richard A. Maniskas, Esq.

280 King of Prussia Road

Radnor, PA 19087

1-888-299-7706 (toll-free) or 1-610-667-7706

Or by e-mail at info@sbclasslaw.com

Source: prnewswire

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