US: Wet Seal urges against rebel shareholder's plans
By Leonie Barrie | 25 September 2012
Teen fashion retailer The Wet Seal Inc is has urged its shareholders to reject efforts by dissident investor Clinton Group to replace experienced board members - and says it has taken "positive steps" to address their concerns.
The row between the retailer and Clinton Group, which owns more than 5% of The Wet Seal's outstanding stock, has been rumbling on since June.
Last week Wet Seal attempted to diffuse the situation by letting two directors nominated by Clinton Group join its board as well as engaging the shareholder group in its search for a new CEO. But it now says these proposals have been rejected.
For its part Clinton Group has proposed five nominees for the board. These are: United Retail Group founder Ralph Benaroya; formerCharming 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.
However, in a letter sent to shareholders late on Monday (24 September), Wet Seal said: "Clinton Group simply does not have any semblance of a business strategy, let alone one that will help improve business performance and enhance the company's long-term value."
Last week Wet Seal ended a "poison pill" shareholder rights plan recently adopted to defend itself against potential takeovers.
It also expanded its board to include two new independent directors who both have "significant" fast fashion retail experience. Kathy Bronstein is a former CEO of Wet Seal and John Goodman was most recently executive vice president of apparel and home at Sears as well as former CEO of Charlotte Russe.
The teen retailer added that it is confident it can to return to a strong performance by focusing on a fast fashion strategy beginning in the fourth quarter.
Companies: Wet Seal, Aeropostale, Charming Shoppes, Charlotte Russe
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