A large shareholder revealed an incraesed stake in Lenox Group (NYSE:LNX) today ahead of the company's long-anticipated annual meeting, according to a Schedule 13D/A filing with the SEC. The move follows the company's ongoing review of strategic alternatives and a series of insider purchases made in August. Shareholders are closely watching this situation as insides and hedge funds are starting to take large positions in the company.

The Clinton Group upped its stake in the giftware retailer from 10.9% earlier this year to 15.4% today. The activist hedge fund also reiterated its concern over previous management and the board's performance in guiding the company. Specifically, the Clinton Group urged the company to consult the company before making any material changes to the company.

These changes included: (1) modification of the company's engagement of Carl Marks Advisory Group, (2) offers of employment for senior management positions, (3) capital structure and financing issues, and (4) any strategic transactions potentially being contemplated by the company. Essentially, the Clinton Group wants to make sure that everything is kosher during the process of exploring strategic alternatives.

The activist hedge fund also offered to help facilitate the company's turnaround and exploration of strategic alternatives by providing three director candidates for shareholder consideration. The increase stake announced today gives the hedge fund much more sway in any election process. Whether its directors will be elected remains to be seen, but this is definitely a stock worth watching!

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