Activist hedge fund Breeden Capital disclosed a 7.7 percent stake in Zale Corporation (NYSE:ZLC) saying it held discussions with the company's management, according to a Schedule 13D filing with the SEC. Shareholders are hoping that the fund - headed by former SEC chief Richard Breeden - can help unlock value for shareholders.

"Discussions to date have related primarily to the business, financial performance, operations, strategic plans and disclosure practices of the Company," said Richard Breeden. "As a result of [our] ongoing review and evaluation of the business, they may also communicate with the board of directors and/or other shareholders from time to time with respect to operational, strategic, financial or governance matters, or otherwise encourage actions that [we] believe in their discretion will enhance shareholder value."

Breeden has had success during his past pushes for changes in companies like Applebees (NDAQ:APPB) and H&R Block (NYSE:HRB) and many are hoping he can do the same here. Shares in the company jumped almost 4% today on the news as shareholder eagerly anticipate the activists involvement. After all, shares in Zale have fallen almost 20% over the past year amid falling same-store-sales numbers and earnings.

In the end, investors will have to wait to see what becomes of this situation. Clearly, with such a large stake built up, Breeden will do what it takes to unlock value and improve shareholder value. Combined, these factors make ZLC a stock worth watching!

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