US: Wet Seal rebel shareholder wants new board
Dissident stockholder Clinton Group is persisting in its calls for change at troubled teen fashion retailer The Wet Seal, proposing five new board members for the company.
The investor said it would seek stockholder consent to replace four existing members of the US retailer’s board, also filling a currently vacant position.
The move comes after The Wet Seal announced a second quarter loss of US$12.4m, with sales down 9.1%, sending its shares down nearly 9% in early trading.
“This board has failed shareholders,” said Joseph DePerio, senior portfolio manager at Clinton Group, which owns more than 5% of The Wet Seal’s outstanding stock.
“After years of strategy shifts, personnel changes and financial and operational mismanagement, it is time for shareholders to put in place a board that will work feverishly to fix the damage, repair the brand and earnestly consider the company’s strategic alternatives.”
Lincoln said the retailer’s stock had fallen by more than 40% in the past year, and 75% over the past decade.
Its five nominees for the board are: United Retail Group founder Ralph Benaroya; former Charming Shoppes CEO Dorrit Bern; ex-president of Aeropostale Mindy Meads; Lynda Davey, chairman and CEO of investment bank Avalon Group; and John Mills, president of consultant SDE.
The Wet Seal has recently adopted a “poison pill” shareholder rights plan to defend itself against potential takeovers, but denied that this was in response to any specific bid to take control of the business.
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