Investment Group Buys Stake in Zale

The Citadel Investment Group LLC owns a 5.31 percent stake in jewelry retailer Zale Corp., according to a recent Securities and Exchange Commission filing.

Zale Corp., Irving, Texas, runs 2,250 fine-jewelry stores. Citadel, based in Chicago, owns 2.6 million shares of Zale, The Chicago Tribune reports.

In its SEC filing, Citadel reportedly said that the shares “were not acquired … with the effect of changing or influencing” the control of Zale.

The Web site, reports that a week earlier, activist hedge fund manager and former Securities and Exchange Commission chairman Richard Breeden had been in talks with Zale’s executives and directors in regards to the jewelry company’s financial performance and strategic options, including an auction of key assets.

At a Goldman, Sachs & Co. retail conference on Sept. 6, Zale chief executive officer Betsy Burton said Zale will consider closing some unproductive stores and divesting some brands, though she added that no sales were imminent, reports. 

Breeden, who operates Breeden Capital Management, a Greenwich, Conn.-based investment fund manager, filed an activist Schedule 13D disclosing the fund’s 7.7 percent stake with the jewelry retailer, indicating that this may be the first step in a larger activist campaign at the company, reports.

The one-year-old Breeden Capital Management has $1.2 billion in assets under management, reports. Breeden received seed capital from the California Public Employees’ Retirement System.

Breeden was chairman of the SEC during President George H.W. Bush’s administration between 1989 and 1993.