Zale (ZLC) Inactive 10-Q30 May 142014 Q3 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
Document and Entity Information	Apr. 30, 2014	27-May-14
Document and Entity Information	'	'
Entity Registrant Name	'ZALE CORP	'
Entity Central Index Key	'0000109156	'
Document Type	'10-Q	'
Document Period End Date	30-Apr-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--07-31	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	43,352,724
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q3	'

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013
CONSOLIDATED STATEMENTS OF OPERATIONS	'	'	'	'
Revenues	$431,029	$442,708	$1,450,092	$1,470,927
Cost of sales	189,820	209,861	667,476	708,095
Gross margin	241,209	232,847	782,616	762,832
Selling, general and administrative	220,066	215,037	708,372	700,565
Depreciation and amortization	7,203	8,131	22,325	25,165
Other charges (gains)	23	-249	512	-1,096
Operating earnings	13,917	9,928	51,407	38,198
Interest expense	5,401	5,668	17,106	17,598
Earnings before income taxes	8,516	4,260	34,301	20,600
Income tax (benefit) expense	-306	-792	1,999	2,604
Net earnings	$8,822	$5,052	$32,302	$17,996
Basic net earnings per common share (in dollars per share)	$0.23	$0.16	$0.94	$0.56
Diluted net earnings per common share (in dollars per share)	$0.19	$0.13	$0.71	$0.45
Weighted average number of common shares outstanding:	'	'	'	'
Basic (in shares)	38,017	32,480	34,519	32,401
Diluted (in shares)	45,875	39,277	45,209	40,139

CONSOLIDATED_STATEMENTS_OF_COM

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	3 Months Ended		9 Months Ended
In Thousands, unless otherwise specified	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	'	'	'	'
Net earnings	$8,822	$5,052	$32,302	$17,996
Foreign currency translation adjustment	3,299	-2,094	-12,697	-1,624
Unrealized loss on interest rate swaps	-141	'	-2,817	'
Reclassification of loss on interest rate swaps to interest expense	43	'	128	'
Unrealized (loss) gain on securities, net	-164	318	-218	339
Comprehensive income	$11,859	$3,276	$16,698	$16,711

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Apr. 30, 2014	Jul. 31, 2013	Apr. 30, 2013
In Thousands, unless otherwise specified	Apr. 30, 2014	Jul. 31, 2013	Apr. 30, 2013
Current assets:	'	'	'
Cash and cash equivalents	$21,895	$17,060	$25,693
Merchandise inventories	845,428	767,540	828,197
Other current assets	50,261	53,335	48,862
Total current assets	917,584	837,935	902,752
Property and equipment	667,743	675,705	679,065
Less accumulated depreciation and amortization	-561,300	-570,427	-570,827
Net property and equipment	106,443	105,278	108,238
Goodwill	93,621	98,372	99,975
Other assets	37,556	38,560	46,300
Deferred tax asset	107,110	107,110	96,888
Total assets	1,262,314	1,187,255	1,254,153
Current liabilities:	'	'	'
Accounts payable and accrued liabilities	241,193	220,558	260,608
Deferred revenue	80,934	82,110	84,190
Deferred tax liability	106,579	107,016	97,110
Total current liabilities	428,706	409,684	441,908
Long-term debt	454,002	410,050	466,480
Deferred revenue - long-term	102,947	109,135	113,924
Other liabilities	70,926	73,057	33,922
Commitments and contingencies	'	'	'
Stockholders' investment:	'	'	'
Common stock	588	488	488
Additional paid-in capital	148,831	155,625	158,760
Accumulated other comprehensive income	31,411	47,015	52,818
Accumulated earnings	467,444	435,140	442,390
Total stockholders' investment before treasury stock	648,274	638,268	654,456
Treasury stock	-442,541	-452,939	-456,537
Total stockholders' investment	205,733	185,329	197,919
Total liabilities and stockholders' investment	$1,262,314	$1,187,255	$1,254,153

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
In Thousands, unless otherwise specified	Apr. 30, 2014	Apr. 30, 2013
Cash Flows From Operating Activities:	'	'
Net earnings	$32,302	$17,996
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:	'	'
Non-cash interest	2,157	2,156
Depreciation and amortization	22,325	25,165
Deferred taxes	-559	491
Loss on disposition of property and equipment	1,399	935
Impairment of property and equipment	488	851
Stock-based compensation	3,570	2,466
Changes in operating assets and liabilities:	'	'
Merchandise inventories	-86,640	-87,575
Other current assets	1,730	-2,385
Other assets	335	1,648
Accounts payable and accrued liabilities	20,341	55,744
Deferred revenue	-5,553	-10,194
Other liabilities	-2,533	-4,375
Net cash (used in) provided by operating activities	-10,638	2,923
Cash Flows From Investing Activities:	'	'
Payments for property and equipment	-28,212	-16,459
Purchase of available-for-sale investments	-7,006	-1,674
Proceeds from sales of available-for-sale investments	6,330	3,449
Net cash used in investing activities	-28,888	-14,684
Cash Flows From Financing Activities:	'	'
Borrowings under revolving credit agreement	3,829,600	3,950,500
Payments on revolving credit agreement	-3,784,800	-3,936,900
Proceeds from exercise of stock options	884	81
Payments on capital lease obligations	-821	-751
Net cash provided by financing activities	44,863	12,930
Effect of exchange rate changes on cash	-502	-79
Net change in cash and cash equivalents	4,835	1,090
Cash and cash equivalents at beginning of period	17,060	24,603
Cash and cash equivalents at end of period	$21,895	$25,693

BASIS_OF_PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
BASIS OF PRESENTATION	Apr. 30, 2014
BASIS OF PRESENTATION	'
BASIS OF PRESENTATION	'

	1. BASIS OF PRESENTATION

	References to the "Company," "we," "us," and "our" in this Form 10-Q are references to Zale Corporation and its subsidiaries. We are, through our wholly owned subsidiaries, a leading specialty retailer of fine jewelry in North America. At April 30, 2014, we operated 1,013 specialty retail jewelry stores and 616 kiosks located primarily in shopping malls throughout the United States, Canada and Puerto Rico.

	We report our operations under three segments: Fine Jewelry, Kiosk Jewelry and All Other. Fine Jewelry is comprised of our three core national brands, Zales Jewelers®, Zales Outlet® and Peoples Jewellers® and our two regional brands, Gordon's Jewelers® and Mappins Jewellers®. Each brand specializes in fine jewelry and watches, with merchandise and marketing emphasis focused on diamond products. Zales Jewelers® is our national brand in the U.S. providing moderately priced jewelry to a broad range of guests. Zales Outlet® operates in outlet malls and neighborhood power centers and capitalizes on Zale Jewelers'® national marketing and brand recognition. Gordon's Jewelers® is a value-oriented regional jeweler. Peoples Jewellers®, Canada's largest fine jewelry retailer, provides guests with an affordable assortment and an accessible shopping experience. Mappins Jewellers® offers Canadian guests a broad selection of merchandise from engagement rings to fashionable and contemporary fine jewelry.

	Kiosk Jewelry operates under the brand names Piercing Pagoda®, Plumb Gold™, and Silver and Gold Connection® through mall-based kiosks and is focused on the opening price point guest. Kiosk Jewelry specializes in gold, silver and non-precious metal products that capitalize on the latest fashion trends.

	All Other includes our insurance and reinsurance operations, which offer insurance coverage primarily to our private label credit card guests.

	We also maintain a presence in the retail market through our ecommerce sites www.zales.com, www.zalesoutlet.com, www.gordonsjewelers.com, www.peoplesjewellers.com and www.pagoda.com.

	We consolidate all of our U.S. operations into Zale Delaware, Inc. ("ZDel"), a wholly owned subsidiary of Zale Corporation. ZDel is the parent company for several subsidiaries, including three that are engaged primarily in providing credit insurance to our credit customers. We consolidate our Canadian retail operations into Zale Canada Holding, L.P., which is a wholly owned subsidiary of Zale Corporation. All significant intercompany transactions have been eliminated. The consolidated financial statements are unaudited and have been prepared by the Company in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In management's opinion, all material adjustments (consisting of normal recurring accruals and adjustments) and disclosures necessary for a fair presentation have been made. Because of the seasonal nature of the retail business, operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 2013 filed with the Securities and Exchange Commission ("SEC") on September 27, 2013.

	On February 19, 2014, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Signet Jewelers Limited, a Bermuda corporation ("Signet"), and Carat Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Signet ("Merger Sub"). The Merger Agreement provides for the acquisition of the Company by Signet at a price of $21 per share in cash. On May 29, 2014, the merger was consummated and Merger Sub was merged with and into the Company (the "Merger") and we became a wholly owned subsidiary of Signet. In connection with the consummation of the Merger, all outstanding obligations in respect of principal, interest and fees under the Amended Term Loan and the Amended Credit Agreement (see Note 4) were repaid in full and the Company terminated all applicable commitments, thereunder, including all outstanding interest rate swap agreements (see Note 4) related to the Amended Credit Agreement. In addition, the New York Stock Exchange has filed an application on Form 25 with the SEC to delist and deregister the Company's common stock under Section 12(b) of the Exchange Act. Upon effectiveness of such Form 25, the Company intends to file with the SEC a Form 15 requesting deregistration of the Company's common stock under Section 12(g) of the Exchange Act and the suspension of the Company's reporting obligations under Sections 13 and 15(d) of the Exchange Act.

	For additional information regarding the Merger and the Merger Agreement, please refer to our Current Report on Form 8-K filed with the SEC on February 19, 2014 (the "February 19^th 8-K"). The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached as Exhibit 2.1 to the February 19^th 8-K.

	Reclassification. Certain prior year amounts have been reclassified in the accompanying consolidated financial statements to conform to our fiscal year 2014 presentation.

FAIR_VALUE_MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
FAIR VALUE MEASUREMENTS	Apr. 30, 2014
FAIR VALUE MEASUREMENTS	'
FAIR VALUE MEASUREMENTS	'

	2. FAIR VALUE MEASUREMENTS

	Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. In determining fair value, Accounting Standards Codification ("ASC") 820, Fair Value Measurement, establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair values. These tiers include:


	Level 1	—		Quoted prices for identical instruments in active markets;
	Level 2	—		Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose significant inputs are observable; and
	Level 3	—		Instruments whose significant inputs are unobservable.

	Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

	The following tables include our assets and liabilities that are measured at fair value on a recurring basis (in thousands):


		Fair Value as of April 30,
		2014
		Level 1			Level 2		Level 3
	Assets
	U.S. Treasury securities	$	9,941		$	—	$	—
	U.S. government agency securities		—			2,044		—
	Corporate bonds and notes		—			6,841		—
	Corporate equity securities		2,486			—		—


		$	12,427		$	8,885	$	—




	Liabilities
	Interest rate swaps	$	—		$	2,689	$	—









		Fair Value as of April 30,
		2013
		Level 1			Level 2		Level 3
	Assets
	U.S. Treasury securities	$	19,572		$	—	$	—
	U.S. government agency securities		—			2,800		—
	Corporate bonds and notes		—			866		—
	Corporate equity securities		4,700			—		—


		$	24,272		$	3,666	$	—





	Investments in U.S. Treasury securities and corporate equity securities are based on quoted market prices for identical instruments in active markets, and therefore were classified as a Level 1 measurement in the fair value hierarchy. Investments in U.S. government agency securities and corporate bonds and notes are based on quoted prices for similar instruments in active markets, and therefore were classified as a Level 2 measurement in the fair value hierarchy (see Note 3 for additional information related to our investments).

	The fair value of our interest rate swaps is calculated using significant observable inputs including the present value of estimated future cash flows using interest rate curves, and therefore were classified as a Level 2 measurement in the fair value hierarchy (see Note 4 for additional information related to our interest rate swaps).

	Assets that are Measured at Fair Value on a Nonrecurring Basis

Impairment losses related to store-level property and equipment are calculated using significant unobservable inputs including the present value of future cash flows expected to be generated using a risk-adjusted weighted average cost of capital of 14.0 percent to 15.5 percent, and therefore are classified as a Level 3 measurement in the fair value hierarchy. For the nine months ended April 30, 2014, store-level property and equipment of $0.7 million was written down to their fair value of $0.2 million, resulting in an impairment charge of $0.5 million. For the nine months ended April 30, 2013, store-level property and equipment of $1.0 million was written down to their fair value of $0.1 million, resulting in an impairment charge of $0.9 million.

At the end of the second quarter of fiscal year 2014, we completed our annual impairment testing of goodwill pursuant to ASC 350, Intangible—Goodwill and Other. Based on the test results, we concluded that no impairment was necessary for the $74.2 million of goodwill related to the Peoples Jewellers acquisition and the $19.4 million of goodwill related to the Piercing Pagoda acquisition. As of the date of the test, the fair value of the Peoples Jewellers and Piercing Pagoda reporting units would have to decline by more than 30 percent and 41 percent, respectively, to be considered for potential impairment. We calculated the estimated fair value of our reporting units using Level 3 inputs, including: (1) cash flow projections for five years; (2) terminal year growth rates of two percent based on estimates of long-term inflation expectations; and (3) discount rates of 14.0 percent to 15.5 percent based on a risk-adjusted weighted average cost of capital that reflects current market conditions. While we believe we have made reasonable estimates and assumptions to calculate the fair value of the reporting units, it is possible a material change could occur. If our actual results are not consistent with estimates and assumptions used to calculate fair value, we may be required to recognize goodwill impairments.

Other Financial Instruments

As cash and short-term cash investments, trade payables and certain other short-term financial instruments are all short-term in nature, their carrying amount approximates fair value. The outstanding principal of our revolving credit agreement and senior secured term loan approximates fair value as of April 30, 2014. The fair value of the revolving credit agreement and the senior secured term loan were based on estimates of current interest rates for similar debt, a Level 3 input.

INVESTMENTS

INVESTMENTS	9 Months Ended
INVESTMENTS	Apr. 30, 2014
INVESTMENTS	'
INVESTMENTS	'

	3. INVESTMENTS

	Investments in debt and equity securities held by our insurance subsidiaries are reported as other assets in the accompanying consolidated balance sheets. Investments are recorded at fair value based on quoted market prices for identical or similar securities. All investments are classified as available-for-sale.

	Our investments consist of the following (in thousands):


		April 30, 2014				April 30, 2013
		Cost		Fair Value		Cost		Fair Value
	U.S. Treasury securities	$	9,257	$	9,941	$	18,145	$	19,572
	U.S. government agency securities		1,975		2,044		2,632		2,800
	Corporate bonds and notes		6,722		6,841		773		866
	Corporate equity securities		1,701		2,486		3,501		4,700


		$	19,655	$	21,312	$	25,051	$	27,938





	At April 30, 2014 and 2013, the carrying value of investments included a net unrealized gain of $1.7 million and $2.9 million, respectively, which is included in accumulated other comprehensive income. Realized gains and losses on investments are determined on the specific identification basis. There were no material net realized gains or losses during the three and nine months ended April 30, 2014 and 2013. Investments with a carrying value of $7.4 million were on deposit with various state insurance departments at April 30, 2014 and 2013, respectively, as required by law.

	Debt securities outstanding as of April 30, 2014 mature as follows (in thousands):


		Cost		Fair Value
	Less than one year	$	6,155	$	6,191
	Year two through year five		5,193		5,482
	Year six through year ten		6,448		6,959
	After ten years		158		194


		$	17,954	$	18,826

LONGTERM_DEBT

LONG-TERM DEBT	9 Months Ended
LONG-TERM DEBT	Apr. 30, 2014
LONG-TERM DEBT	'
LONG-TERM DEBT	'

	4. LONG—TERM DEBT

	Long-term debt consists of the following (in thousands):


		April 30,
		2014		2013
	Revolving credit agreement	$	372,000	$	383,400
	Senior secured term loan		80,000		80,000
	Capital lease obligations		2,002		3,080


		$	454,002	$	466,480





	Amended and Restated Revolving Credit Agreement

	On July 24, 2012, we amended and restated our revolving credit agreement (the "Amended Credit Agreement") with Bank of America, N.A. and certain other lenders. The Amended Credit Agreement totals $665 million, including a $15 million first-in, last-out facility (the "FILO Facility"), and matures in July 2017. Borrowings under the Amended Credit Agreement (excluding the FILO Facility) are limited to a borrowing base equal to 90 percent of the appraised liquidation value of eligible inventory (less certain reserves that may be established under the agreement), plus 90 percent of eligible credit card receivables. Borrowings under the FILO Facility are limited to a borrowing base equal to the lesser of: (i) 2.5 percent of the appraised liquidation value of eligible inventory or (ii) $15 million. The Amended Credit Agreement is secured by a first priority security interest and lien on merchandise inventory, credit card receivables and certain other assets and a second priority security interest and lien on all other assets.

	Based on the most recent inventory appraisal, the monthly borrowing rates calculated from the cost of eligible inventory range from 68 to 73 percent for the period of May through September 2014, 82 to 84 percent for the period of October through December 2014 and 71 to 73 percent for the period of January through April 2015.

	Borrowings under the Amended Credit Agreement (excluding the FILO Facility) bear interest at either: (i) LIBOR plus the applicable margin (ranging from 175 to 225 basis points) or (ii) the base rate (as defined in the Amended Credit Agreement) plus the applicable margin (ranging from 75 to 125 basis points). Borrowings under the FILO Facility bear interest at either: (i) LIBOR plus the applicable margin (ranging from 350 to 400 basis points) or (ii) the base rate plus the applicable margin (ranging from 250 to 300 basis points). We are also required to pay a quarterly unused commitment fee of 37.5 basis points based on the preceding quarter's unused commitment.

	If excess availability (as defined in the Amended Credit Agreement) falls below certain levels we will be required to maintain a minimum fixed charge coverage ratio of 1.0. Borrowing availability was approximately $238 million as of April 30, 2014, which exceeded the excess availability requirement by $177 million. The fixed charge coverage ratio was 2.0 as of April 30, 2014. The Amended Credit Agreement contains various other covenants including restrictions on the incurrence of certain indebtedness, payment of dividends, liens, investments, acquisitions and asset sales. As of April 30, 2014, we were in compliance with all covenants.

	We incurred debt issuance costs associated with the revolving credit agreement totaling $12.1 million, which consisted of $5.6 million of costs related to the Amended Credit Agreement and $6.5 million of unamortized costs associated with the prior agreement. The debt issuance costs are included in other assets in the accompanying consolidated balance sheets and are amortized to interest expense on a straight-line basis over the five-year life of the agreement.

	Interest Rate Swap Agreements

	In September 2013, we executed interest rate swaps with Bank of America, N.A. to hedge the variability of cash flows resulting from fluctuations in the one-month LIBOR associated with our Amended Credit Agreement. The interest rate swaps replaced the one-month LIBOR with the fixed interest rates shown in the table below and are settled monthly. The swaps qualify as cash flow hedges and, to the extent effective, changes in their fair values are recorded in accumulated other comprehensive income in the consolidated balance sheet. The changes in fair values are reclassified from accumulated other comprehensive income to interest expense in the same period that the hedged items affect interest expense.

	Interest rate swaps as of April 30, 2014 are as follows:


	Period	Notional Amount		Fixed			Fair Value
	Period	(in thousands)		Interest Rate			(in thousands)
	October 2013 - July 2014	$	215,000		0.29	%	$	73
	August 2014 - July 2016	$	215,000		1.19	%		2,616


							$	2,689





	The change in the fair value of the interest rate swaps for the three and nine months ended April 30, 2014 totaled $0.1 million and $2.8 million, respectively, and is included as an unrealized loss in other comprehensive income. There were no material amounts reclassified from accumulated other comprehensive income to interest expense during the three and nine months ended April 30, 2014. The current portion of the fair value of the interest rate swaps totaled $1.5 million and is included in accounts payable and accrued liabilities in the accompanying consolidated balance sheet. The current portion represents the amount that is expected to be reclassified from other comprehensive income to interest expense over the next 12 months. The non-current portion of the fair value of the interest rate swaps totaled $1.2 million and is included in other liabilities in the accompanying consolidated balance sheet.

	Amended and Restated Senior Secured Term Loan

	On July 24, 2012, we amended and restated our senior secured term loan (the "Amended Term Loan") with Z Investment Holdings, LLC, an affiliate of Golden Gate Capital. The Amended Term Loan totals $80.0 million, matures in July 2017 and is subject to a borrowing base equal to: (i) 107.5 percent of the appraised liquidation value of eligible inventory plus (ii) 100 percent of credit card receivables and an amount equal to the lesser of $40 million or 100 percent of the appraised liquidation value of intellectual property minus (iii) the borrowing base under the Amended Credit Agreement. In the event the outstanding principal under the Amended Term Loan exceeds the Amended Term Loan borrowing base, availability under the Amended Credit Agreement would be reduced by the excess. As of April 30, 2014, the outstanding principal under the Amended Term Loan did not exceed the borrowing base. The Amended Term Loan is secured by a second priority security interest on merchandise inventory and credit card receivables and a first priority security interest on substantially all other assets.

	Borrowings under the Amended Term Loan bear interest at 11 percent payable on a quarterly basis. We may repay all or any portion of the Amended Term Loan with the following penalty prior to maturity: (i) the present value of the required interest payments that would have been made if the prepayment had not occurred during the first year; (ii) 4 percent during the second year; (iii) 3 percent during the third year; (iv) 2 percent during the fourth year and (v) no penalty in the fifth year. The Amended Credit Agreement restricts our ability to prepay the Amended Term Loan if the fixed charge coverage ratio is not equal to or greater than 1.0 after giving effect to the prepayment.

	The Amended Term Loan includes various covenants which are consistent with the covenants in the Amended Credit Agreement, including restrictions on the incurrence of certain indebtedness, payment of dividends, liens, investments, acquisitions, asset sales and the requirement to maintain a minimum fixed charge coverage ratio of 1.0 if excess availability thresholds under the Amended Credit Agreement are not maintained. As of April 30, 2014, we were in compliance with all covenants.

	We incurred costs associated with the Amended Term Loan totaling $4.4 million, of which approximately $2 million was recorded in interest expense during the fourth quarter of fiscal year 2012. The remaining $2.4 million consists of debt issuance costs included in other assets in the accompanying consolidated balance sheet and are amortized to interest expense on a straight-line basis over the five-year life of the agreement.

	In connection with the consummation of the Merger, all outstanding obligations in respect of principal, interest and fees under the Amended Term Loan and the Amended Credit Agreement were repaid in full and the Company terminated all applicable commitments thereunder, including all outstanding interest rate swap agreements related to the Amended Credit Agreement.

Warrant and Registration Rights Agreement

In connection with the execution of the senior secured term loan in May 2010, we entered into a Warrant and Registration Rights Agreement (the "Warrant Agreement") with Z Investment Holdings, LLC ("Z Investment"). Under the terms of the Warrant Agreement, Z Investment held 11.1 million warrants (the "Warrants") to purchase shares of our common stock, on a one-for-one basis, for an exercise price of $2.00 per share.

On March 18, 2014, Z Investment exercised all of its Warrants to purchase shares of our common stock. The exercise price for the Warrants was paid through surrender of warrants to purchase 1,042,609 shares of our common stock. As a result of the exercise of the Warrants, Z Investment received 10,022,075 shares, or approximately 23 percent of our common shares outstanding.

Capital Lease Obligations

We enter into capital leases related to vehicles for our field management. The vehicles are included in property and equipment in the accompanying consolidated balance sheets and are depreciated over a four-year life. Capital leases, net of accumulated depreciation, included in property and equipment as of April 30, 2014 and 2013 totaled $2.0 million and $3.0 million, respectively.

OTHER_CHARGES_GAINS

OTHER CHARGES (GAINS)	9 Months Ended
OTHER CHARGES (GAINS)	Apr. 30, 2014
OTHER CHARGES (GAINS)	'
OTHER CHARGES (GAINS)	'

	5. OTHER CHARGES (GAINS)

	During the second quarter of fiscal years 2014 and 2013, we recorded charges related to the impairment of long-lived assets for underperforming stores, primarily in Fine Jewelry, totaling $0.5 million and $0.9 million, respectively. The impairment of long-lived assets is based on the amount that the carrying value exceeds the estimated fair value of the assets. The fair value is based on future cash flow projections over the remaining lease term using a discount rate that we believe is commensurate with the risk inherent in our current business model. If actual results are not consistent with our cash flow projections, we may be required to record additional impairments.

	Beginning in June 2004, various class-action lawsuits were filed alleging that the De Beers group violated U.S. state and federal antitrust, consumer protection and unjust enrichment laws. During the three and nine months ended April 30, 2013, we received proceeds totaling $0.3 million and $2.2 million, respectively, as a result of a settlement reached in the lawsuit.

EARNINGS_PER_COMMON_SHARE

EARNINGS PER COMMON SHARE	9 Months Ended
EARNINGS PER COMMON SHARE	Apr. 30, 2014
EARNINGS PER COMMON SHARE	'
EARNINGS PER COMMON SHARE	'

	6. EARNINGS PER COMMON SHARE

	Basic earnings per common share is computed by dividing net earnings by the weighted-average number of common shares outstanding for the reporting period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted earnings per share, the basic weighted-average number of shares is increased by the dilutive effect of stock options, restricted share awards and warrants issued in connection with the senior secured term loan determined using the Treasury Stock method. On March 18, 2014, Z Investment exercised all of its Warrants to purchase shares of our common stock (see Note 4). As a result of the exercise, 4.8 million and 5.1 million shares were included in the basic and diluted weighted average share count, respectively, for the three months ended April 30, 2014. For the nine months ended April 30, 2014, 1.5 million and 8.1 million shares were included in the basic and diluted weighted average share count, respectively, as a result of the Warrant exercise.

	The following table presents a reconciliation of the diluted weighted average shares (in thousands):


		Three Months Ended				Nine Months Ended
		April 30,				April 30,
		2014		2013		2014		2013
	Basic weighted average shares		38,017		32,480		34,519		32,401
	Effect of dilutive securities:
	Warrants		5,120		5,894		8,086		6,639
	Stock options and restricted share awards		2,738		903		2,604		1,099


	Diluted weighted average shares		45,875		39,277		45,209		40,139





	The calculation of diluted weighted average shares excludes the impact of 0.8 million and 1.9 million antidilutive stock options for the three months ended April 30, 2014 and 2013, respectively, and 0.8 million and 1.8 million antidilutive stock options for the nine months ended April 30, 2014 and 2013, respectively.

ACCUMULATED_OTHER_COMPREHENSIV

ACCUMULATED OTHER COMPREHENSIVE INCOME	9 Months Ended
ACCUMULATED OTHER COMPREHENSIVE INCOME	Apr. 30, 2014
ACCUMULATED OTHER COMPREHENSIVE INCOME	'
ACCUMULATED OTHER COMPREHENSIVE INCOME	'

	7. ACCUMULATED OTHER COMPREHENSIVE INCOME

	The following table includes detail regarding changes in the composition of accumulated other comprehensive income (in thousands):


		Three Months Ended						Nine Months Ended
		April 30,						April 30,
		2014			2013			2014			2013
	Beginning of period	$	28,374		$	54,594		$	47,015		$	54,103
	Foreign currency translation adjustment		3,299			(2,094	)		(12,697	)		(1,624	)
	Unrealized loss on interest rate swaps		(141	)		—			(2,817	)		—
	Reclassification of loss on interest rate swaps to interest expense		43			—			128			—
	Unrealized (loss) gain on securities, net		(164	)		318			(218	)		339


	End of period	$	31,411		$	52,818		$	31,411		$	52,818

INCOME_TAXES

INCOME TAXES	9 Months Ended
INCOME TAXES	Apr. 30, 2014
INCOME TAXES	'
INCOME TAXES	'

	8. INCOME TAXES

	We are required to assess the available positive and negative evidence to estimate if sufficient future income will be generated to utilize deferred tax assets. A significant piece of negative evidence that we consider is cumulative losses (generally defined as losses before income taxes) incurred over the most recent three-year period. Such evidence limits our ability to consider other subjective evidence such as our projections for future growth. As of April 30, 2014 and 2013, cumulative losses were incurred over the applicable three-year period.

	Our valuation allowances totaled $81.8 million and $88.3 million as of April 30, 2014 and 2013, respectively. The valuation allowances were established due to the uncertainty of our ability to utilize certain federal, state and foreign net operating loss carryforwards in the future. The amount of the deferred tax asset considered realizable could be adjusted if negative evidence, such as three-year cumulative losses, no longer exists and additional consideration is given to our growth projections.

SEGMENTS

SEGMENTS	9 Months Ended
SEGMENTS	Apr. 30, 2014
SEGMENTS	'
SEGMENTS	'

	9. SEGMENTS

	We report our operations under three business segments: Fine Jewelry, Kiosk Jewelry, and All Other (See Note 1). All corresponding items of segment information in prior periods have been presented consistently. Management's expectation is that overall economics of each of our major brands within each reportable segment will be similar over time.

	We use earnings before unallocated corporate overhead, interest and taxes but include an internal charge for inventory carrying cost to evaluate segment profitability. Unallocated costs before income taxes include corporate employee-related costs, administrative costs, information technology costs, corporate facilities costs and depreciation and amortization. Income tax information by segment is not included as taxes are calculated at a company-wide level and not allocated to each segment.


		Three Months Ended						Nine Months Ended
		April 30,						April 30,
	Selected Financial Data by Segment	2014			2013			2014			2013
		(amounts in thousands)
	Revenues:
	Fine Jewelry(a)	$	367,695		$	378,476		$	1,262,214		$	1,275,744
	Kiosk		60,396			61,375			179,396			187,098
	All Other		2,938			2,857			8,482			8,085


	Total revenues	$	431,029		$	442,708		$	1,450,092		$	1,470,927




	Depreciation and amortization:
	Fine Jewelry	$	4,750		$	5,231		$	14,763		$	16,145
	Kiosk		496			652			1,589			2,080
	All Other		—			—			—			—
	Unallocated		1,957			2,248			5,973			6,940


	Total depreciation and amortization	$	7,203		$	8,131		$	22,325		$	25,165




	Operating earnings:
	Fine Jewelry	$	19,487		$	11,974		$	65,758		$	42,984
	Kiosk		8,993			5,321			17,060			14,085
	All Other		1,293			1,403			3,794			3,309
	Unallocated(b)		(15,856	)		(8,770	)		(35,205	)		(22,180	)


	Total operating earnings	$	13,917		$	9,928		$	51,407		$	38,198






	(a)
	Includes $59.0 million and $63.6 million for the three months ended April 30, 2014 and 2013, respectively, and $233.1 million and $247.0 million for the nine months ended April 30, 2014 and 2013, respectively, related to foreign operations.

	(b)
	Includes credits of $16.1 million and $16.0 million for the three months ended April 30, 2014 and 2013, respectively, and $49.0 million and $48.0 million for the nine months ended April 30, 2014 and 2013, respectively, to offset internal carrying costs charged to the segments. Also includes a gain totaling $0.3 million and $2.2 million related to the De Beers settlement received during the three and nine months ended April 30, 2013, respectively.

CONTINGENCIES

CONTINGENCIES	9 Months Ended
CONTINGENCIES	Apr. 30, 2014
CONTINGENCIES	'
CONTINGENCIES	'

	10. CONTINGENCIES

	The Company is a defendant in three purported class action lawsuits, Tessa Hodge v. Zale Delaware, Inc., d/b/a Piercing Pagoda which was filed on April 23, 2013 in the Superior Court of the State of California, County of San Bernardino, Naomi Tapia v. Zale which was filed on July 3, 2013 in the U.S. District Court, Southern District of California, and Melissa Roberts v. Zale Delaware, Inc. which was filed on October 7, 2013 in the Superior Court of the State of California, County of Los Angeles. All three cases include allegations that the Company violated various wage and hour labor laws. Relief is sought on behalf of current and former Piercing Pagoda and Zale's employees. The lawsuits seek to recover damages, penalties and attorneys' fees as a result of the alleged violations. The Company is investigating the underlying allegations and intends to vigorously defend its position against them. The Company cannot reasonably estimate the potential loss or range of loss, if any, for the lawsuits.

	The Company and its directors have been named as defendants in five purported shareholder class action lawsuits filed in the Court of Chancery of the State of Delaware: Andrew Breyer v. Zale Corporation, et al. filed on February 24, 2014, Marc Stein v. Zale Corporation, et al. and Ravinder Singh v. Zale Corporation, et al. each filed on March 3, 2014, Mary Smart v. Zale Corporation, et al. filed on March 6, 2014, and David Pill v. Zale Corporation, et al., filed on March 12, 2014. Each lawsuit alleges that, in connection with the proposed transaction between the Company and Signet, entered into on February 19, 2014, the Company's directors breached their fiduciary duties to the Company's shareholders and that the Company, Signet and Merger Sub aided and abetted such breaches. Each lawsuit seeks injunctive relief, rescission in the event the Merger is consummated, monetary damages and attorneys' and other fees and costs. On March 25, 2014, the lawsuits were consolidated under the caption In re Zale Corporation Shareholders Litigation and co-lead plaintiffs were appointed. On April 23, 2014, the plaintiffs filed an amended consolidated complaint, adding allegations related to the Company's preliminary proxy statement and moved for expedited proceedings and a preliminary injunction preventing consummation of the Merger. The parties subsequently resolved plaintiffs' motion for expedited proceedings and, on May 23, 2014, the plaintiffs' motion for a preliminary injunction was denied. The Company and its directors believe that the claims in the consolidated lawsuits are without merit and intend to vigorously defend the consolidated lawsuit. The Company cannot reasonably estimate the potential loss or range of loss, if any, for the lawsuits.

	We are involved in legal and governmental proceedings as part of the normal course of our business. Reserves have been established based on management's best estimates of our potential liability in these matters. These estimates have been developed in consultation with internal and external counsel and are based on a combination of litigation and settlement strategies. Management believes that such litigation and claims will be resolved without material effect on our financial position or results of operations.

DEFERRED_REVENUE

DEFERRED REVENUE	9 Months Ended
DEFERRED REVENUE	Apr. 30, 2014
DEFERRED REVENUE	'
DEFERRED REVENUE	'

	11. DEFERRED REVENUE

	We offer our Fine Jewelry guests lifetime warranties on certain products that cover sizing and breakage with an option to purchase theft protection for a two-year period. Revenues related to lifetime warranty sales are recognized in proportion to when the expected costs will be incurred, which we estimate to be over an eight-year period. A significant change in estimates related to the time period or pattern in which warranty-related costs are expected to be incurred could adversely impact our revenues and earnings. Revenues related to the optional theft protection are recognized over the two-year contract period on a straight-line basis. We also offer our Fine Jewelry guests a two-year watch warranty and our Fine Jewelry and Kiosk Jewelry guests a one-year warranty that covers breakage. The revenue from the two-year watch warranty and one-year breakage warranty is recognized on a straight-line basis over the respective contract terms.

	The change in deferred revenue associated with the sale of warranties is as follows (in thousands):


		Three Months Ended						Nine Months Ended
		April 30,						April 30,
		2014			2013			2014			2013
	Deferred revenue, beginning of period	$	186,671		$	202,477		$	191,245		$	208,516
	Warranties sold(a)		33,135			31,727			102,976			101,276
	Revenue recognized		(35,925	)		(36,090	)		(110,340	)		(111,678	)


	Deferred revenue, end of period	$	183,881		$	198,114		$	183,881		$	198,114






	(a)
	Warranty sales for the nine months ended April 30, 2014 include approximately $1.8 million related to the depreciation in the Canadian currency rate on the beginning of the period deferred revenue balance. The change in the Canadian currency rate did not have a significant impact on the beginning of the period deferred revenue balance for the three months ended April 30, 2014 and 2013 or the nine months ended April 30, 2013.

	Gross margin associated with warranties totaled $28.5 million and $29.3 million during the three months ended April 30, 2014 and 2013, respectively, and $88.5 million and $91.6 million during the nine months ended April 30, 2014 and 2013, respectively.

BASIS_OF_PRESENTATION_Policies

BASIS OF PRESENTATION (Policies)	9 Months Ended
BASIS OF PRESENTATION (Policies)	Apr. 30, 2014
BASIS OF PRESENTATION	'
Reclassification	'
Reclassification	Reclassification. Certain prior year amounts have been reclassified in the accompanying consolidated financial statements to conform to our fiscal year 2014 presentation.

FAIR_VALUE_MEASUREMENTS_Tables

FAIR VALUE MEASUREMENTS (Tables)	9 Months Ended
FAIR VALUE MEASUREMENTS (Tables)	Apr. 30, 2014
FAIR VALUE MEASUREMENTS	'
Schedule of assets and liabilities that are measured at fair value on a recurring basis	'

	The following tables include our assets and liabilities that are measured at fair value on a recurring basis (in thousands):


		Fair Value as of April 30,
		2014
		Level 1		Level 2		Level 3
	Assets
	U.S. Treasury securities	$	9,941	$	—	$	—
	U.S. government agency securities		—		2,044		—
	Corporate bonds and notes		—		6,841		—
	Corporate equity securities		2,486		—		—


		$	12,427	$	8,885	$	—




	Liabilities
	Interest rate swaps	$	—	$	2,689	$	—









		Fair Value as of April 30,
		2013
		Level 1		Level 2		Level 3
	Assets
	U.S. Treasury securities	$	19,572	$	—	$	—
	U.S. government agency securities		—		2,800		—
	Corporate bonds and notes		—		866		—
	Corporate equity securities		4,700		—		—


		$	24,272	$	3,666	$	—

INVESTMENTS_Tables

INVESTMENTS (Tables)	9 Months Ended
INVESTMENTS (Tables)	Apr. 30, 2014
INVESTMENTS	'
Schedule of investments	'

	Our investments consist of the following (in thousands):


		April 30, 2014				April 30, 2013
		Cost		Fair Value		Cost		Fair Value
	U.S. Treasury securities	$	9,257	$	9,941	$	18,145	$	19,572
	U.S. government agency securities		1,975		2,044		2,632		2,800
	Corporate bonds and notes		6,722		6,841		773		866
	Corporate equity securities		1,701		2,486		3,501		4,700


		$	19,655	$	21,312	$	25,051	$	27,938




Schedule of debt securities outstanding by maturity date	'

	Debt securities outstanding as of April 30, 2014 mature as follows (in thousands):


		Cost		Fair Value
	Less than one year	$	6,155	$	6,191
	Year two through year five		5,193		5,482
	Year six through year ten		6,448		6,959
	After ten years		158		194


		$	17,954	$	18,826

LONGTERM_DEBT_Tables

LONG-TERM DEBT (Tables)	9 Months Ended
LONG-TERM DEBT (Tables)	Apr. 30, 2014
LONG-TERM DEBT	'
Schedule of long-term debt	'

	Long-term debt consists of the following (in thousands):


		April 30,
		2014		2013
	Revolving credit agreement	$	372,000	$	383,400
	Senior secured term loan		80,000		80,000
	Capital lease obligations		2,002		3,080


		$	454,002	$	466,480




Schedule of interest rate swaps	'

	Interest rate swaps as of April 30, 2014 are as follows:


	Period	Notional Amount		Fixed			Fair Value
	Period	(in thousands)		Interest Rate			(in thousands)
	October 2013 - July 2014	$	215,000		0.29	%	$	73
	August 2014 - July 2016	$	215,000		1.19	%		2,616


							$	2,689

EARNINGS_PER_COMMON_SHARE_Tabl

EARNINGS PER COMMON SHARE (Tables)	9 Months Ended
EARNINGS PER COMMON SHARE (Tables)	Apr. 30, 2014
EARNINGS PER COMMON SHARE	'
Schedule of reconciliation of the diluted weighted average shares	'

	The following table presents a reconciliation of the diluted weighted average shares (in thousands):


		Three Months Ended				Nine Months Ended
		April 30,				April 30,
		2014		2013		2014		2013
	Basic weighted average shares		38,017		32,480		34,519		32,401
	Effect of dilutive securities:
	Warrants		5,120		5,894		8,086		6,639
	Stock options and restricted share awards		2,738		903		2,604		1,099


	Diluted weighted average shares		45,875		39,277		45,209		40,139

ACCUMULATED_OTHER_COMPREHENSIV1

ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)	9 Months Ended
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)	Apr. 30, 2014
ACCUMULATED OTHER COMPREHENSIVE INCOME	'
Schedule of composition of accumulated other comprehensive income	'

	The following table includes detail regarding changes in the composition of accumulated other comprehensive income (in thousands):


		Three Months Ended						Nine Months Ended
		April 30,						April 30,
		2014			2013			2014			2013
	Beginning of period	$	28,374		$	54,594		$	47,015		$	54,103
	Foreign currency translation adjustment		3,299			(2,094	)		(12,697	)		(1,624	)
	Unrealized loss on interest rate swaps		(141	)		—			(2,817	)		—
	Reclassification of loss on interest rate swaps to interest expense		43			—			128			—
	Unrealized (loss) gain on securities, net		(164	)		318			(218	)		339


	End of period	$	31,411		$	52,818		$	31,411		$	52,818

SEGMENTS_Tables

SEGMENTS (Tables)	9 Months Ended
SEGMENTS (Tables)	Apr. 30, 2014
SEGMENTS	'
Schedule of selected financial data by segment	'






		Three Months Ended						Nine Months Ended
		April 30,						April 30,
	Selected Financial Data by Segment	2014			2013			2014			2013
		(amounts in thousands)
	Revenues:
	Fine Jewelry(a)	$	367,695		$	378,476		$	1,262,214		$	1,275,744
	Kiosk		60,396			61,375			179,396			187,098
	All Other		2,938			2,857			8,482			8,085


	Total revenues	$	431,029		$	442,708		$	1,450,092		$	1,470,927




	Depreciation and amortization:
	Fine Jewelry	$	4,750		$	5,231		$	14,763		$	16,145
	Kiosk		496			652			1,589			2,080
	All Other		—			—			—			—
	Unallocated		1,957			2,248			5,973			6,940


	Total depreciation and amortization	$	7,203		$	8,131		$	22,325		$	25,165




	Operating earnings:
	Fine Jewelry	$	19,487		$	11,974		$	65,758		$	42,984
	Kiosk		8,993			5,321			17,060			14,085
	All Other		1,293			1,403			3,794			3,309
	Unallocated(b)		(15,856	)		(8,770	)		(35,205	)		(22,180	)


	Total operating earnings	$	13,917		$	9,928		$	51,407		$	38,198






	(a)
	Includes $59.0 million and $63.6 million for the three months ended April 30, 2014 and 2013, respectively, and $233.1 million and $247.0 million for the nine months ended April 30, 2014 and 2013, respectively, related to foreign operations.

	(b)
	Includes credits of $16.1 million and $16.0 million for the three months ended April 30, 2014 and 2013, respectively, and $49.0 million and $48.0 million for the nine months ended April 30, 2014 and 2013, respectively, to offset internal carrying costs charged to the segments. Also includes a gain totaling $0.3 million and $2.2 million related to the De Beers settlement received during the three and nine months ended April 30, 2013, respectively.

DEFERRED_REVENUE_Tables

DEFERRED REVENUE (Tables)	9 Months Ended
DEFERRED REVENUE (Tables)	Apr. 30, 2014
DEFERRED REVENUE	'
Schedule of change in deferred revenue associated with the sale of warranties	'

	The change in deferred revenue associated with the sale of warranties is as follows (in thousands):


		Three Months Ended						Nine Months Ended
		April 30,						April 30,
		2014			2013			2014			2013
	Deferred revenue, beginning of period	$	186,671		$	202,477		$	191,245		$	208,516
	Warranties sold(a)		33,135			31,727			102,976			101,276
	Revenue recognized		(35,925	)		(36,090	)		(110,340	)		(111,678	)


	Deferred revenue, end of period	$	183,881		$	198,114		$	183,881		$	198,114






	(a)
	Warranty sales for the nine months ended April 30, 2014 include approximately $1.8 million related to the depreciation in the Canadian currency rate on the beginning of the period deferred revenue balance. The change in the Canadian currency rate did not have a significant impact on the beginning of the period deferred revenue balance for the three months ended April 30, 2014 and 2013 or the nine months ended April 30, 2013.

BASIS_OF_PRESENTATION_Details

BASIS OF PRESENTATION (Details) (USD $)	9 Months Ended
	Apr. 30, 2014	Feb. 19, 2014	Apr. 30, 2014	Apr. 30, 2014	Apr. 30, 2014
	item	Signet	Fine Jewelry	Specialty retail jewelry stores	Kiosk stores
		Zale Corporation	item	item	item
Basis of Presentation	'	'	'	'	'
Number of stores	'	'	'	1,013	616
Number of core national brands	'	'	3	'	'
Number of regional brands	'	'	2	'	'
Number of reportable segments	3	'	'	'	'
Number of subsidiaries engaged in providing credit insurance to credit customers	3	'	'	'	'
Share price (in dollars per share)	'	$21	'	'	'

FAIR_VALUE_MEASUREMENTS_Detail

FAIR VALUE MEASUREMENTS (Details) (USD $)	3 Months Ended		9 Months Ended
FAIR VALUE MEASUREMENTS (Details) (USD $)	Jan. 31, 2014	Jan. 31, 2013	Apr. 30, 2014	Apr. 30, 2013
Liabilities	'	'	'	'
Impairments related to goodwill and property and equipment	$500,000	$900,000	$488,000	$851,000
Store-level property and equipment	'	'	'	'
Liabilities	'	'	'	'
Impairments related to goodwill and property and equipment	'	'	500,000	900,000
Cost \| Store-level property and equipment	'	'	'	'
Liabilities	'	'	'	'
Store-level property and equipment	'	'	700,000	1,000,000
Fair Value	'	'	'	'
Assets	'	'	'	'
Investments	'	'	21,312,000	27,938,000
Fair Value \| U.S. Treasury securities	'	'	'	'
Assets	'	'	'	'
Investments	'	'	9,941,000	19,572,000
Fair Value \| U.S. government agency securities	'	'	'	'
Assets	'	'	'	'
Investments	'	'	2,044,000	2,800,000
Fair Value \| Corporate bonds and notes	'	'	'	'
Assets	'	'	'	'
Investments	'	'	6,841,000	866,000
Fair Value \| Corporate equity securities	'	'	'	'
Assets	'	'	'	'
Investments	'	'	2,486,000	4,700,000
Level 3 \| Minimum	'	'	'	'
Liabilities	'	'	'	'
Weighted average cost of capital (as a percent)	'	'	14.00%	'
Level 3 \| Maximum	'	'	'	'
Liabilities	'	'	'	'
Weighted average cost of capital (as a percent)	'	'	15.50%	'
Level 3 \| Store-level property and equipment \| Minimum	'	'	'	'
Liabilities	'	'	'	'
Weighted average cost of capital (as a percent)	'	'	14.00%	'
Level 3 \| Store-level property and equipment \| Maximum	'	'	'	'
Liabilities	'	'	'	'
Weighted average cost of capital (as a percent)	'	'	15.50%	'
Recurring basis \| Level 1	'	'	'	'
Assets	'	'	'	'
Total assets	'	'	12,427,000	24,272,000
Recurring basis \| Level 1 \| U.S. Treasury securities	'	'	'	'
Assets	'	'	'	'
Investments	'	'	9,941,000	19,572,000
Recurring basis \| Level 1 \| Corporate equity securities	'	'	'	'
Assets	'	'	'	'
Investments	'	'	2,486,000	4,700,000
Recurring basis \| Level 2	'	'	'	'
Assets	'	'	'	'
Total assets	'	'	8,885,000	3,666,000
Recurring basis \| Level 2 \| Interest rate swaps	'	'	'	'
Liabilities	'	'	'	'
Derivative	'	'	2,689,000	'
Recurring basis \| Level 2 \| U.S. government agency securities	'	'	'	'
Assets	'	'	'	'
Investments	'	'	2,044,000	2,800,000
Recurring basis \| Level 2 \| Corporate bonds and notes	'	'	'	'
Assets	'	'	'	'
Investments	'	'	6,841,000	866,000
Nonrecurring basis \| Level 3 \| Store-level property and equipment	'	'	'	'
Liabilities	'	'	'	'
Store-level property and equipment	'	'	$200,000	$100,000

FAIR_VALUE_MEASUREMENTS_Detail1

FAIR VALUE MEASUREMENTS (Details 2) (USD $)	6 Months Ended				9 Months Ended
	Jan. 31, 2014	Apr. 30, 2014	Jul. 31, 2013	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2014	Apr. 30, 2014	Jan. 31, 2014	Jan. 31, 2014	Jan. 31, 2014	Jan. 31, 2014
					Level 3	Level 3	Level 3	Peoples Jewellers	Peoples Jewellers	Piercing Pagoda	Piercing Pagoda
						Minimum	Maximum		Minimum		Minimum
FAIR VALUE MEASUREMENTS	'	'	'	'	'	'	'	'	'	'	'
Impairment of goodwill	$0	'	'	'	'	'	'	'	'	'	'
GOODWILL	'	'	'	'	'	'	'	'	'	'	'
Goodwill	'	$93,621,000	$98,372,000	$99,975,000	'	'	'	$74,200,000	'	$19,400,000	'
Percentage of excess of fair value of goodwill over carrying value, to be considered for potential impairment	'	'	'	'	'	'	'	'	30.00%	'	41.00%
Cash flow projection period used as an input in calculating fair value of goodwill	'	'	'	'	'5 years	'	'	'	'	'	'
Terminal year growth rates used as an input in calculating fair value of goodwill (as a percent)	'	'	'	'	2.00%	'	'	'	'	'	'
Discount rates based on a weighted average cost of capital used as an input in calculating fair value of goodwill (as a percent)	'	'	'	'	'	14.00%	15.50%	'	'	'	'

INVESTMENTS_Details

INVESTMENTS (Details) (USD $)	Apr. 30, 2014	Apr. 30, 2013
INVESTMENTS	'	'
Net unrealized gain	$1,700,000	$2,900,000
Carrying value of investments on deposit with various state insurance departments	7,400,000	7,400,000
Debt securities outstanding maturities at cost	'	'
Less than one year	6,155,000	'
Year two through year five	5,193,000	'
Year six through year ten	6,448,000	'
After ten years	158,000	'
Total debt securities outstanding amortized, cost	17,954,000	'
Debt securities outstanding maturities measured at fair value	'	'
Less than one year	6,191,000	'
Year two through year five	5,482,000	'
Year six through year ten	6,959,000	'
After ten years	194,000	'
Total debt securities outstanding measured at fair value	18,826,000	'
Cost	'	'
INVESTMENTS	'	'
Available for Sale Securities, Amortized Cost	19,655,000	25,051,000
Fair Value	'	'
INVESTMENTS	'	'
Available for Sale Securities Noncurrent, Fair Value	21,312,000	27,938,000
U.S. Treasury securities \| Cost	'	'
INVESTMENTS	'	'
Available for Sale Securities, Amortized Cost	9,257,000	18,145,000
U.S. Treasury securities \| Fair Value	'	'
INVESTMENTS	'	'
Available for Sale Securities Noncurrent, Fair Value	9,941,000	19,572,000
U.S. government agency securities \| Cost	'	'
INVESTMENTS	'	'
Available for Sale Securities, Amortized Cost	1,975,000	2,632,000
U.S. government agency securities \| Fair Value	'	'
INVESTMENTS	'	'
Available for Sale Securities Noncurrent, Fair Value	2,044,000	2,800,000
Corporate bonds and notes \| Cost	'	'
INVESTMENTS	'	'
Available for Sale Securities, Amortized Cost	6,722,000	773,000
Corporate bonds and notes \| Fair Value	'	'
INVESTMENTS	'	'
Available for Sale Securities Noncurrent, Fair Value	6,841,000	866,000
Corporate equity securities \| Cost	'	'
INVESTMENTS	'	'
Available for Sale Securities, Amortized Cost	1,701,000	3,501,000
Corporate equity securities \| Fair Value	'	'
INVESTMENTS	'	'
Available for Sale Securities Noncurrent, Fair Value	$2,486,000	$4,700,000

LONGTERM_DEBT_Details

LONG-TERM DEBT (Details) (USD $)

Apr. 30, 2014

Jul. 31, 2013

Apr. 30, 2013

Jan. 31, 2014

Apr. 30, 2014

Apr. 30, 2013

Jul. 31, 2012

Apr. 30, 2014

Jul. 24, 2012

Apr. 30, 2014

Jul. 31, 2012

Jul. 24, 2012

Apr. 30, 2014

Jul. 31, 2012

Apr. 30, 2014

Apr. 30, 2013

Jul. 31, 2012

Apr. 30, 2014

Jul. 24, 2012

Apr. 30, 2014

Apr. 30, 2013

Interest rate swaps

Revolving credit agreement

Amended Credit Agreement

FILO Facility

Amended Credit Agreement (excluding the FILO Facility)

Revolving credit prior to amended and restated revolving credit agreement

Senior Secured Term Loan

Senior secured term loan amended July 24, 2012

Capital lease obligations

Cash flow hedges

October 2013 - July 2014

August 2014 - July 2016

Minimum

May through September 2014

October through December 2014

January through April 2015

LIBOR

Base rate

LIBOR

Base rate

Minimum

Accounts payable and accrued liabilities

Other liabilities

Cash flow hedges

Minimum

Maximum

Minimum

Maximum

Minimum

Maximum

Minimum

Maximum

Minimum

Maximum

Minimum

Maximum

Minimum

Maximum

Long-term debt

$454,002,000

$410,050,000

$466,480,000

$383,400,000

$372,000,000

$80,000,000

$2,002,000

$3,080,000

Maximum borrowing capacity

665,000,000

15,000,000

Maturity date

24-Jul-17

Borrowing capacity description

'Borrowings under the Amended Credit Agreement (excluding the FILO Facility) are limited to a borrowing base equal to 90 percent of the appraised liquidation value of eligible inventory (less certain reserves that may be established under the agreement), plus 90 percent of eligible credit card receivables. Borrowings under the FILO Facility are limited to a borrowing base equal to the lesser of: (i) 2.5 percent of the appraised liquidation value of eligible inventory or (ii) $15 million. The Amended Credit Agreement is secured by a first priority security interest and lien on merchandise inventory, credit card receivables and certain other assets and a second priority security interest and lien on all other assets. Based on the most recent inventory appraisal, the monthly borrowing rates calculated from the cost of eligible inventory range from 68 to 73 percent for the period of May through September 2014, 82 to 84 percent for the period of October through December 2014 and 71 to 73 percent for the period of January through April 2015.

Percentage of appraised liquidation value of eligible inventory used to calculate cap amount

2.50%

90.00%

107.50%

Percentage of eligible credit card receivables

90.00%

100.00%

Percentage of cost of eligible inventory used to calculate monthly borrowing rates

68.00%

73.00%

82.00%

84.00%

71.00%

73.00%

Variable interest rate base

'LIBOR

'Base rate

'LIBOR

'Base rate

Variable interest rate margin (as a percent)

3.50%

4.00%

2.50%

3.00%

1.75%

2.25%

0.75%

1.25%

Quarterly unused commitment fee (as a percent)

0.38%

Covenant terms of revolving credit facility

'If excess availability (as defined in the Amended Credit Agreement) falls below certain levels we will be required to maintain a minimum fixed charge coverage ratio of 1.0. Borrowing availability was approximately $238 million as of April 30, 2014, which exceeded the excess availability requirement by $177 million. The fixed charge coverage ratio was 2.00 as of April 30, 2014. The Amended Credit Agreement contains various other covenants including restrictions on the incurrence of certain indebtedness, payment of dividends, liens, investments, acquisitions and asset sales. As of April 30, 2014, we were in compliance with all covenants.

Fixed charge coverage ratio

Remaining borrowing capacity

238,000,000

Remaining borrowing capacity in excess of minimum availability requirement

177,000,000

Debt issuance costs

12,100,000

5,600,000

4,400,000

Unamortized debt issuance costs

6,500,000

2,400,000

Life of the credit agreement

'5 years

Interest rate swaps disclosures

Notional Amount

215,000,000

Fixed interest rate (as a percent)

0.29%

1.19%

Fair Value

2,689,000

1,500,000

1,200,000

73,000

2,616,000

Change in the fair value of the interest rate swaps

100,000

2,800,000

Principal amount of debt issued

80,000,000

Term loan restrictions on revolving credit agreement

'The Amended Term Loan totals $80.0 million, matures in July 2017 and is subject to a borrowing base equal to: (i) 107.5 percent of the appraised liquidation value of eligible inventory plus (ii) 100 percent of credit card receivables and an amount equal to the lesser of $40 million or 100 percent of the appraised liquidation value of intellectual property minus (iii) the borrowing base under the Amended Credit Agreement. In the event the outstanding principal under the Amended Term Loan exceeds the Amended Term Loan borrowing base, availability under the Amended Credit Agreement would be reduced by the excess. As of April 30, 2014, the outstanding principal under the Amended Term Loan did not exceed the borrowing base.

Borrowing cap amount attributable to appraised liquidation value of intellectual property

40,000,000

Percentage of appraised liquidation value of intellectual property used to calculate cap amount

100.00%

Interest rate (as a percent)

11.00%

Penalty on repayment of debt during the second year (as a percent)

4.00%

Penalty on repayment of debt during the third year (as a percent)

3.00%

Penalty on repayment of debt during the fourth year (as a percent)

2.00%

Penalty on repayment of debt during the fifth year (as a percent)

0.00%

Covenant terms of senior secured term loan

'The Amended Term Loan includes various covenants which are consistent with the covenants in the Amended Credit Agreement, including restrictions on the incurrence of certain indebtedness, payment of dividends, liens, investments, acquisitions, asset sales and the requirement to maintain a minimum fixed charge coverage ratio of 1.0 if excess availability thresholds under the Amended Credit Agreement are not maintained. As of April 30, 2014, we were in compliance with all covenants.

Interest expense

$2,000,000

LONGTERM_DEBT_Details_2

LONG-TERM DEBT (Details 2) (Warrant, Z Investment Holdings, LLC, USD $)	0 Months Ended
	Mar. 18, 2014	31-May-10
Warrant \| Z Investment Holdings, LLC	'	'
Warrant and Registration Rights Agreement	'	'
Number of warrants held by Z Investment Holdings, LLC (in shares)	'	11,100,000
Number of common shares that can be purchased by converting each warrant	'	1
Exercise price of warrants (in dollars per share)	'	$2
Number of warrants surrendered to purchase common stock	1,042,609	'
Number of common stock issued upon warrants exercised	10,022,075	'
Warrants as a percentage of common stock issued upon warrants exercised	23.00%	'

LONGTERM_DEBT_Details_3

LONG-TERM DEBT (Details 3) (USD $)	Apr. 30, 2014	Jul. 31, 2013	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013
In Thousands, unless otherwise specified				Capital lease obligations	Capital lease obligations
				Vehicles	Vehicles
Long-term debt	'	'	'	'	'
Useful life of vehicle	'	'	'	'4 years	'
Capital leases	$106,443	$105,278	$108,238	$2,000	$3,000

OTHER_CHARGES_GAINS_Details

OTHER CHARGES (GAINS) (Details) (USD $)	3 Months Ended			9 Months Ended
OTHER CHARGES (GAINS) (Details) (USD $)	Apr. 30, 2014	Jan. 31, 2014	Jan. 31, 2013	Apr. 30, 2014	Apr. 30, 2013
OTHER CHARGES (GAINS)	'	'	'	'	'
Store impairments	'	$500,000	$900,000	$488,000	$851,000
De Beers settlement	$300,000	'	'	$2,200,000	'

EARNINGS_PER_COMMON_SHARE_Deta

EARNINGS PER COMMON SHARE (Details)	3 Months Ended		9 Months Ended
EARNINGS PER COMMON SHARE (Details)	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013
EARNINGS PER COMMON SHARE	'	'	'	'
Basic weighted average shares upon Warrant exercise	4,800,000	'	1,500,000	'
Diluted weighted average shares upon Warrant exercise	5,100,000	'	8,100,000	'
Reconciliation of the diluted weighted average shares	'	'	'	'
Basic weighted average shares	38,017,000	32,480,000	34,519,000	32,401,000
Effect of dilutive securities:	'	'	'	'
Warrants (in shares)	5,120,000	5,894,000	8,086,000	6,639,000
Stock options and restricted share awards	2,738,000	903,000	2,604,000	1,099,000
Diluted weighted average shares	45,875,000	39,277,000	45,209,000	40,139,000
Stock Options	'	'	'	'
Effect of dilutive securities:	'	'	'	'
Antidilutive securities (in shares)	800,000	1,900,000	800,000	1,800,000

ACCUMULATED_OTHER_COMPREHENSIV2

ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) (USD $)	3 Months Ended		9 Months Ended
In Thousands, unless otherwise specified	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013
Changes in the composition of accumulated other comprehensive income	'	'	'	'
Balance at the beginning of the period	$28,374	$54,594	$47,015	$54,103
Foreign currency translation adjustment	3,299	-2,094	-12,697	-1,624
Unrealized loss on interest rate swaps	-141	'	-2,817	'
Reclassification of loss on interest rate swaps to interest expense	43	'	128	'
Unrealized (loss) gain on securities, net	-164	318	-218	339
Balance at the end of the period	$31,411	$52,818	$31,411	$52,818

INCOME_TAXES_Details

INCOME TAXES (Details) (USD $)	9 Months Ended
In Millions, unless otherwise specified	Apr. 30, 2014	Apr. 30, 2013
INCOME TAXES	'	'
Most recent period for which cumulative losses incurred is to be considered	'3 years	'
Valuation allowances related to deferred tax assets	$81.80	$88.30

SEGMENTS_Details

SEGMENTS (Details) (USD $)	3 Months Ended		9 Months Ended
	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013
	Apr. 30, 2014	Apr. 30, 2013	item	Apr. 30, 2013
SEGMENTS	'	'	'	'
Number of business segments	'	'	3	'
SEGMENTS	'	'	'	'
Total revenues	$431,029,000	$442,708,000	$1,450,092,000	$1,470,927,000
Total depreciation and amortization	7,203,000	8,131,000	22,325,000	25,165,000
Total operating earnings	13,917,000	9,928,000	51,407,000	38,198,000
De Beers settlement	300,000	'	2,200,000	'
Unallocated	'	'	'	'
SEGMENTS	'	'	'	'
Total depreciation and amortization	1,957,000	2,248,000	5,973,000	6,940,000
Total operating earnings	-15,856,000	-8,770,000	-35,205,000	-22,180,000
Internal carrying costs offset	16,100,000	16,000,000	49,000,000	48,000,000
De Beers settlement	'	300,000	'	2,200,000
Fine Jewelry	'	'	'	'
SEGMENTS	'	'	'	'
Total revenues	367,695,000	378,476,000	1,262,214,000	1,275,744,000
Fine Jewelry \| Foreign operations	'	'	'	'
SEGMENTS	'	'	'	'
Revenue related to foreign operations	59,000,000	63,600,000	233,100,000	247,000,000
Fine Jewelry \| Operating Segment	'	'	'	'
SEGMENTS	'	'	'	'
Total depreciation and amortization	4,750,000	5,231,000	14,763,000	16,145,000
Total operating earnings	19,487,000	11,974,000	65,758,000	42,984,000
Kiosk	'	'	'	'
SEGMENTS	'	'	'	'
Total revenues	60,396,000	61,375,000	179,396,000	187,098,000
Kiosk \| Operating Segment	'	'	'	'
SEGMENTS	'	'	'	'
Total depreciation and amortization	496,000	652,000	1,589,000	2,080,000
Total operating earnings	8,993,000	5,321,000	17,060,000	14,085,000
All Other	'	'	'	'
SEGMENTS	'	'	'	'
Total revenues	2,938,000	2,857,000	8,482,000	8,085,000
All Other \| Operating Segment	'	'	'	'
SEGMENTS	'	'	'	'
Total operating earnings	$1,293,000	$1,403,000	$3,794,000	$3,309,000

CONTINGENCIES_Details

CONTINGENCIES (Details)	6 Months Ended	1 Months Ended
	Oct. 07, 2013	Mar. 12, 2014
	Purported class-action lawsuits	Purported shareholder class action lawsuits
	item	item
CONTINGENCIES	'	'
Number of lawsuits filed	3	5

DEFERRED_REVENUE_Details

DEFERRED REVENUE (Details) (USD $)	3 Months Ended		9 Months Ended
DEFERRED REVENUE (Details) (USD $)	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013
Change in deferred revenue associated with the sale of warranties	'	'	'	'
Deferred revenue, beginning of period	$186,671,000	$202,477,000	$191,245,000	$208,516,000
Warranties sold	33,135,000	31,727,000	102,976,000	101,276,000
Revenue recognized	-35,925,000	-36,090,000	-110,340,000	-111,678,000
Deferred revenue, end of period	183,881,000	198,114,000	183,881,000	198,114,000
Translation adjustment for fluctuation in Canadian currency rate (amounts included in warranties sold)	'	'	1,800,000	'
Gross margin	$28,500,000	$29,300,000	$88,500,000	$91,600,000
Optional theft protection \| Fine Jewelry	'	'	'	'
DEFERRED REVENUE	'	'	'	'
Contract period of arrangement	'	'	'2 years	'
Revenue recognition period	'	'	'2 years	'
Lifetime warranty	'	'	'	'
DEFERRED REVENUE	'	'	'	'
Contract period of arrangement	'	'	'8 years	'
Watch warranty \| Fine Jewelry	'	'	'	'
DEFERRED REVENUE	'	'	'	'
Contract period of arrangement	'	'	'2 years	'
Breakage warranty \| Fine Jewelry	'	'	'	'
DEFERRED REVENUE	'	'	'	'
Contract period of arrangement	'	'	'1 year	'
Breakage warranty \| Kiosk	'	'	'	'
DEFERRED REVENUE	'	'	'	'
Contract period of arrangement	'	'	'1 year	'