A major shareholder of Foothill Ranch-based teen retailer Wet Seal Inc. filed documents with the Securities and Exchange Commission Thursday on its proposed plan to go to stockholders for the removal of four board members.
New York-based asset management firm Clinton Group Inc. announced earlier this month its suggestions for the four board replacements as well as a fifth person to fill a vacant seat left open after the departure of former Chief Executive Susan McGalla in July.
Clinton owns 6.62% of Wet Seal stock.
“Our sole objective is to put in place a new, completely independent board that can execute a strategy that will lead to a turnaround in financial performance and the realization of Wet Seal’s potential,” Clinton Group said in its SEC filing.
Wet Seal operates 469 Wet Seal stores for teen girls and 82 Arden B stores aimed at young women.
At least half of Wet Seal shareholders must consent to Clinton Group’s proposals in order for action to be taken.
Shares of Wet Seal were up 5% in midday trading Thursday to $2.94. The company had a recent market value of $263 million.
The SEC filing came the same day Wet Seal said same-store sales for August fell 18.3%, in line with company expectations.
Analysts on average expected a same-store sales decline of 17%.
The declines were seen in both of the company’s divisions.
Wet Seal August same-store sales were off 18.5%.
Arden B. same-store sales fell 16.3%.
“Since the start of August our aggressive return to our core expertise of fast fashion merchandising has included merchandising to a broader demographic, including the young teen customer, sourcing a wider variety of product more directly from fast fashion vendors, committing to merchandise purchases closer to time of need, and focusing our price points on our core customer—all of which have long driven success at the company,” Wet Seal said in a statement.
Wet Seal Chairman Hal Kahn is leading the company as head of an interim Office of the Chairman, while the company searches for a new chief executive.