* Canadian deal with Citi ends June 30
* 25 pct of Canadian sales made on Citi-backed cards
* Zale looking for other potential partners
NEW YORK, April 5 Citibank will end its deal
with jewelry store operator Zale Corp ZLC.N under which the
bank issues the credit cards used in about one-quarter of the
retailer's sales in Canada.
Citi Cards Canada, a unit of Citigroup Inc (C.N), told the
struggling jeweler on Thursday that their agreement would end
on June 30, according to a filing on Monday with the U.S.
Securities and Exchange Commission.
The jeweler said it was in discussions to find a new
partner for its private-label credit cards.
Zale, whose chains include Zales Jewelers in the United
States and the Peoples Jewellers chain in Canada, was also
facing the end of its deal with Citi in the United States,
where the branded credit cards are used in 40 percent of
Zale said in a filing last week that Citi had given it an
extra month to decide whether to pay a $6 million penalty to
make up for the low level of credit-card sales, or face an
early termination of their U.S. deal, which is scheduled to end
next March. [ID:nN30156554]
Zale had said last month it was expecting Citi to end their
The Dallas-based chain, struggling with sharp sales
declines and currently seeking investors, operates about 200
stores in Canada. Its Canadian operations made up about 14
percent of total revenue in Zale's fiscal year 2009.
(Reporting by Phil Wahba, editing by Maureen Bavdek)