Proxy Advisory Firms Issue Take on Wet Seal Board BattleThursday, September 27, 2012
Foothill Ranch-based retailer Wet Seal Inc. is asking shareholders to reject a proxy battle initiated by a major shareholder.
The request follows independent advisors’ recent opinions that shareholders reject a board overhaul proposal.
New York asset management firm Clinton Group Inc., which has a 6.9% share of Wet Seal stock, has called for the removal of four board members to be replaced with five of its own proposed candidates.
Clinton’s nominees include Mindy Meads, a former chief executive of New York-based retailer Aeropostale Inc., and Dorrit Bern, who served in the same post with Charming Shoppes Inc. in Pennsylvania.
Proxy advisors Institutional Shareholder Services Inc. and Egan-Jones Proxy Services recommended shareholders reject Clinton Group’s proposal to replace the entire board.
Neither firm was hired by Wet Seal, a company spokeswoman said.
Institutional Shareholder Services, however, recommended that two of Clinton Group’s nominees replace two existing board directors.
Wet Seal disagreed with that portion of the opinion in a statement released Wednesday.
“The Wet Seal board and management strongly believe that the best course for shareholders is for the full seven-person board, including its two new strong directors with teen retailer experience, to work constructively and prudently over the next few months to complete the plan to transition back to our fast-fashion strategy,” said Wet Seal Chair Hal Kahn in a statement.
Wet Seal last week announced the addition of two new board members. The picks included former Wet Seal Chief Executive and Vice Chair Kathy Bronstein along with former Charlotte Russe Inc. Chief Executive John Goodman.
Wet Seal operates 469 Wet Seal stores for teen girls and 82 Arden B stores for young women.