What Big Plans Does Breeden Have for Zale?

Activist investor Breeden Capital Management has upped its stake, yet again, in jewelry store operator, Zale Corporation (ZLC), Andrew Ross Sorkin reported today in the New York Times' DealBook.

According to the SEC filing Monday, the investment fund, run by former SEC Chairman Richard Breeden, now holds 15.9 percent in Zale, up from 13.3 percent only a week ago. Sorkin expects this move will mean another management shake-up, despite the fact that only last month, Zale's board named former Children's Place President Neal Goldberg as CEO, replacing Betsy Burton.

Zachery Kouwe and James Covert, writing in the New York Post, agree that Breeden has plans for the retailer:

Breeden Capital... is planning to launch a public campaign to enhance the value of its $136.4 million investment and its primary target is Zale’s board of directors, which has presided over losses in four of the company’s past six fiscal quarters... "No director should think their job is safe," a source [familiar with Breeden's investment strategy] said.

Breeden may already be becoming something of a rebel investor. According to an AP report, via CNN:

In September, Breeden led a dissident shareholder group to win three seats on the board of tax-preparation and accounting services company H&R Block (HRB). He now serves as nonexecutive chairman.

Kouwe and Covert suggest that one alternative for Breeden would be to sell Zale to British-based Signet Group (SIG). An overture from Signet for Zale was rejected by Zale's board in 2006.