Zale Corporation is a specialty retailer of fine jewelry. The company operates under four brand names: Zales Jewelers Gordon's Jewelers Bailey Banks & Biddle Fine Jewelers and Peoples Jewellers. Zales Jewelers provides traditional moderately priced jewelry. Gordon's Jewelers offers contemporary merchandise targeted to regional preferences. Bailey Banks & Biddle Fine Jewelers operates upscale jewelry stores which are considered among the finest jewelry stores in their markets. Peoples Jewellers offers traditional moderately priced jewelry to customers across Canada. Zale Corp. has a market cap of $130.43 million; its shares were traded at around $3.19 with and P/S ratio of 0.06. Zale Corp. had an annual average earning growth of 1.4% over the past 10 years.
Highlight of Business Operations: We were not satisfied with our results in the first quarter of fiscal 2009, as we believe they did not reflect the full contribution of the three initiatives we began to implement at the beginning of the calendar year. However, we believe the actions taken will allow us to not only weather the current challenging economic environment, but also position us to increase market share. The initiatives include (1) focusing on our core customer by providing clarity and value through compelling merchandise assortments, cleaner in-store presentation and an improved marketing message, (2) enhancing our operational effectiveness to ensure that our people and processes are aligned and focused on providing outstanding products and customer service, and (3) maintaining financial discipline with a continued focus on free cash flow generation and prudent use of capital. A critical initial step in improving our merchandise assortment was the aggressive merchandise clearance program that we began during the third quarter of fiscal 2008 and substantially completed during the first quarter of fiscal 2009. We liquidated approximately $163 million of merchandise, which allowed us to reinvest in new products including the national launch of our Celebration Diamond. To improve our operational effectiveness we have eliminated redundancies in brand operations, improved communications with our stores and improved our replenishment process. Finally, we have maintained financial rigor and discipline through the reduction in inventory levels, the identification of an estimated $75 million plus in on-going annualized savings consisting primarily of selling, general and administrative expenses, and reduced our estimated capital spending from $85 million in fiscal 2008 to approximately $32 million in fiscal 2009.
Revenues. Revenues for the quarter ended October 31, 2008 were $364.1 million, a decrease of 3.5 percent compared to revenues of $377.3 million for the same period in the prior year. Comparable store sales decreased 3.7 percent as compared to the same period in the prior year. The decline in comparable store sales was driven by a 6.1 percent decrease in the number of customer transactions in our fine jewelry stores, partially offset by an increase in the average transaction price and our clearance efforts during the first part of the current quarter. We attribute the decline in customer transactions primarily to the general decline in the overall retail environment. The decline was also due to the $3.7 million impact associated with the decrease in the Canadian currency rate, partially offset by a $1.9 million increase in revenues recognized related to lifetime warranties.
Net cash used in operating activities increased from a deficit of $36.1 million for the quarter ended October 31, 2007 to a deficit of $58.1 million for the quarter ended October 31, 2008. The increase in the deficit is primarily the result of an increase in purchased inventory of $79.7 million compared to the same period in the prior year and an increase in operating losses. The increase in purchased inventory is due to the accelerated receipt of Holiday merchandise as part of our initiative to reposition product assortments and improve in-store execution. The increase in the deficit was partially offset by a $43.6 million increase in accounts payable and a $22.6 million decrease in amounts due from vendors for returned merchandise and vendor deposits.
Our cash requirements are funded through cash flows from operations, funds available under our revolving credit facilities and vendor payment terms. Under our U.S. and Canadian revolving credit facilities we may borrow up to $500 million and CAD $30 million, respectively. In general, borrowings under the U.S. facility are capped at 73 percent of inventory during October through December and 69 percent for the remainder of the year, plus 85 percent of credit card receivables. The U.S. facility also provides for increased seasonal borrowing capabilities of up to $100 million and contains an accordion feature that allows us to permanently increase the facility size in $25 million increments up to another $100 million. Vendor purchase order terms typically require payment within 60 days.
As of October 31, 2008, we had cash and cash equivalents totaling $39.4 million. We also had approximately $136 million and CAD $30 million available in borrowing capacity under our U.S. and Canadian revolving credit facilities, respectively. We believe that we have sufficient capacity under our revolving credit facilities to meet our foreseeable financing needs.
During the quarter ended October 31, 2008, we invested approximately $2.8 million in capital expenditures to open six new stores in the Fine Jewelry segment. We invested approximately $8.7 million to remodel, relocate and refurbish 18 stores in our Fine Jewelry segment, seven stores in our Kiosk Jewelry segment and to complete store enhancement projects. We also invested $0.7 million in infrastructure, primarily related to our information technology and distribution centers. We anticipate investing approximately $19.8 million in capital expenditures for the remainder of fiscal year 2009, including nine new store openings, primarily in the Peoples Jewellers and Zales Outlet brands, and approximately $6 million in capital investments related to information technology infrastructure and support operations.
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