Citigroup Inc. has informed Zale Corp. that the bank is not looking to renew the jeweler's private-label credit card agreement once its current term expires, leaving Zale with no option but to either strike a new accord with Citi or look for another financial services company to tie up with.

For almost 10 years, Citigroup had been providing financing for Zale's American customers through the private-label cards.

As per the latest notice sent in from Citi, the agreement it has with the jeweler is set to expire in March 2011, unless it is cut off earlier by either of the parties involved, with certain strings attached, as has been confirmed by Zale in a regulatory filing on Thursday.

According to Zale Treasurer David Sternblitz, the termination of the decade old agreement was more-or-less expected in lieu of the new credit-card legislation. Also, it has been suggested that Citi's move had nothing to do with Zale's performance over the holiday season or the firm's general health.

Zale's shares closed Thursday up 2.1% to $2.47.