Zale Corp. finally ended months of speculation Feb. 23 by announcing it is not likely to sell Piercing Pagoda.

Sources say Apollo Management—which bid for the entire Zale Corp. in 2009—was interested in merging the Pagoda chain with its costume-jewelry franchise, Claire’s.

Zale’s decision could be a reflection of better-than-expected 2010 holiday sales, which rose by 8.5 percent. Overall, comparable store sales for the second quarter ended Jan. 30 rose by 7.9 percent. Revenue grew nearly 7.6 percent, to $626.4 million.

More developments: Two key figures from Golden Gate Capital, which loaned Zale $150 million in May 2010, decided on Jan. 27 to leave and start their own firm. And former director Richard Breeden, Zale’s largest stockholder, has sold 700,000 shares of his stock since Jan. 24, leading to speculation that he wants to extricate himself. He still controls more than 8 million shares.