Zale Corporation (NYSE:ZLC), a leading specialty retailer of fine jewelry in North America, today announced that it has completed the sale of its Bailey Banks & Biddle brand to Finlay Fine Jewelry Corporation for a purchase price of $200 million. The Company expects to realize estimated after-tax proceeds, net of transaction expenses and outstanding payables, of approximately $175 million from the sale.

Additionally, the Company’s Board of Directors has approved a stock repurchase program of up to $200 million of Zale common stock. Further details related to the structure of the repurchase program will be provided in the first quarter earnings release scheduled for November 20, 2007.

Betsy Burton, Chief Executive Officer, commented, “The use of proceeds to repurchase stock is a way to return value to shareholders, and reflects confidence in the future as we execute our strategic plan. On behalf of Zale Corporation, I would like to thank the entire team of associates at Bailey Banks & Biddle for their hard work, dedication and commitment to building a great brand.”

Zale Corporation is a leading specialty retailer of fine jewelry in North America operating approximately 2,200 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation’s brands include Zales Jewelers, Zales Outlet, Gordon’s Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at www.zales.com and www.gordonsjewelers.com. Additional information on Zale Corporation and its brands is available at www.zalecorp.com.