The Wet Seal shareholder Clinton Group is urging the teen apparel retailer to sell the company, following the departure of CEO Susan McGalla yesterday (23 July).

Clinton Group, which owns 4.25% of Wet Seal's common stock, said the sale of the company could give shareholders US$5 to $8 per share.

In a letter to The Wet Seal board, Clinton Group senior portfolio manager Joseph De Perio said the termination of McGalla's employment agreement was a "good first step", describing the former CEO's performance as "stark and unacceptable".

He added that the next step is for the company to be sold. De Perio believes there will be a few potential buyers that will be confident they can turn the business around.

"We simply cannot wait for the board to hire yet another chief executive - the next one will be the fourth in five years - to embark on yet another change in strategy with the aim of turning around the company. That path is simply too uncertain," De Perio added.

Clinton Group also urged the board to return excess capital to shareholders immediately.

In response to the letter, The Wet Seal said it appreciates input from all of its shareholders. 

"The company has engaged in a series of discussions with the Clinton Group following their initial letter on 15 June 2012, and continues to review their recommendation regarding use of the company’s capital," the teen apparel retailer said in a statement today (24 July).

"Wet Seal is committed to maintaining an active dialogue with its shareholders and, as always, will continue to consider ways to maximize value for all stockholders," the company added. 

The Wet Seal lowered its second quarter compareable sales forecast yesterday. The company now expects comparable store sales to fall 10-11%, which is at the low end of its initial guidance range.