Zale Corporation (NYSE: ZLC) board members and management may be in for a shake up after former SEC chairman and activist investor Richard Breeden upped his stake in the company and announced his intent to make some changes at the jeweler. Many shareholders are hoping that the activist can help unlock value in a stock that has dropped from a high of $30 per share earlier this year to its current $14 per share.

“We believe that there are major opportunities for Zale to strengthen its profitability and its market value. We are excited to join with the board and the Zale management team in pursuing those opportunities with vigor and immediacy,” said Mr. Breeden in a statement.

Richard Breeden, who now owns more than 18% of Zale, also announced that he would take two seats on the board with a third one going towards an independent director. The move comes as Zale shares continue to fall after an ill-fated decision to convert Zale stores to upscale locations, which alienated many of its customers and suppliers.

Zale recently announced that it has approved several changes, including the sale of its high-end Baily Banks & Biddle stores and the closure of 60 underperforming stores in the next 90 days. Other believes that the company may be considering strategic alternatives such as a sale but it could be a far-fetched conclusion. Now, with Breeden’s involvement, these rumors have begun to surface yet again.

Overall, it remains unclear what Breeden’s plans for the company are, but we do know that he is an experienced activist investor that is more than capable of unlocking value in his investments. With an open management and board, along with two board seats, it will be interesting to see what actions he takes. Combined, these factors make ZLC a stock worth watching!

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