Teen retailer Wet Seal Inc. said Monday it plans to take a $15.3 million charge in the second quarter for turnaround consultant Barry Gold’s compensation.
The Foothill Ranch-based company said $2 million of the charge is for Gold’s work through July 30, with $13.3 million related to a restricted stock grant.
In a past release, Wet Seal said Gold is “instrumental in both the design and execution of the company’s new merchandise strategy.”
Gold is set to remain with Wet Seal until Jan. 31, 2007. The company also said it will take charges of $300,000 for Gold’s compensation in each of the six quarters after the July period.
If all of Wet Seal’s performance targets are met, the company is set to record total charges of $20 million for Gold’s salary and stock grants through 2007.
Gold has overseen more than 400 stores in Canada and the U.S. in the past.
Last month an analyst with B. Riley & Co. downgraded Wet Seal shares, in part citing Gold’s stock and compensation package as well as its stock runup.
Wet Seal has been struggling for the past two years after some fashion missteps. But Wet Seal is showing signs of progress of late.
Wet Seal closed 105 unprofitable stores in the first quarter. It reported a 59% jump in same-store sales for the month of June. Total sales in June rose 23% to $49 million.
Shares of Wet Seal were up 3.7% to $6.09 on Monday.
