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by Lauren Coleman-Lochner
Bloomberg.com

Zale Corp. is exploring the sale of its Piercing Pagoda kiosk business to focus on its fine jewelry operations, according to three people familiar with the matter.

Buyout firms including Apollo Global Management LLC are looking at the division, according to the people, who declined to be identified because deliberations are private. The unit, whose sales topped $226 million in the year ended July 31, is profitable, the people said.

Zale has owned Piercing Pagoda for the past decade. Started as an ear-piercing booth in Whitehall, Pennsylvania, more than 40 years ago, Piercing Pagoda has about 680 jewelry kiosks in U.S. malls. Revenue for the brand has dropped 9.3 percent over the past two years, less than one-third the decline in the Zales and Gordon’s businesses.

Zale, the third-largest jeweler in the U.S., dropped 28 cents, or 8.2 percent, to $3.15 at 4:02 p.m. in New York Stock Exchange composite trading. The shares have climbed 16 percent this year.

Roxane Barry, a Zale spokeswoman, declined to comment. Charles Zehren, an outside spokesman for New York-based Apollo, didn’t immediately return a phone call seeking comment.

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