Foothill Ranch-based Wet Seal Inc. shareholder Clinton Group Inc. of New York responded to the company’s critique of its attempt to replace the board with some criticism of its own.
A letter from the Wet Seal board, sent to shareholders yesterday, said Clinton Group’s board nominees lacked teen retail or fast-fashion experience in some cases or lack of merchandising or recent operational experience in others.
Clinton’s nominees include Mindy Meads, a former chief executive of New York-based retailer Aeropostale Inc.; John Mills, a former chief operating office of Aeropostale; Dorrit Bern, former chief executive of Charming Shoppes Inc. in Pennsylvania; Raphael Benaroya, former chairman and chief executive of United Retail Group in Rochelle Park, N.J.; and Lynda Davey, co-founder and chief executive of investment bank Avalon Group in New York.
A letter sent to shareholders on Friday from Clinton Group Managing Director Gregory Taxin called his firm’s board picks experienced in selling to teen girls and young women and “leagues ahead of the current board in terms of relevant experience and track record, even with last week’s belated and desperate addition of two new directors.”
Last week saw the return of former Wet Seal Chief Executive Kathy Bronstein to the company’s board, along with former Charlotte Russe Inc. Chief Executive John Goodman.
Bronstein and Goodman joined a board that includes Chair Hal Kahh, former Chief Executive of retailer Steve & Barry’s; Macellum Capital Management LLC Chief Executive Jonathan Duskin; Stikeman Elliot LLP Partner Sidney Horn; Kenneth Reiss, a former partner at Ernst & Young; and Henry Winterstern, managing director of Fortress Investment Group LLC.
Clinton Group is asking shareholders to consent to remove four board members to be replaced with its suggested picks, along with a fifth nominee to fill a vacant seat left open with the departure of former Chief Executive Susan McGalla.
“The company’s performance over the last five years has been extremely frustrating and unnecessarily poor, as the board has made a series of hiring and strategic missteps and failed to optimize the balance sheet,” Taxin said in his letter to shareholders.
Wet Seal same-store sales have been down every month so far this year, with an 18.3% overall drop seen last month.
Wet Seal, with revenue last year of $620.1 million, has 469 Wet Seal stores for teens and 82 Arden B stores for young women.