CONTINGENCIES	9 Months Ended
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.

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.