Reports say that Zale’s one time second largest shareholder Franklin Resources Inc. is beginning to shed its shares in the company, which has been facing bad days. From its shareholding of 16.4 percent in Zale, as of December 31, 2009, Franklin Resources has now a stake holding of 4.7 percent of Zale's shares as of February 28, reports say.

Zale has been struggling to keep its sales up, over the past two years. Its same-store holiday sales had dipped by 12 percent, reports say. In February, Zale had brought in a New York-based investment banking company Peter J. Solomon Co. on its board, in hope that it would help in finding investors and analysing the company’s future options.

Franklin was Zale’s one time second largest investor, and followed activist investor Richard Breeden's Breeden Capital Management LLC, Zale’s largest investor with 28.3 percent stake in the company, reports say.