Wet Seal nixes shareholder rights plan
FOOTHILL RANCH, Calif. (AP) — The Wet Seal Inc. is getting rid of its temporary shareholder rights plan. The struggling teen retailer also named two new board members on Thursday and said it will consider adding another two directors nominated by an activist investor.
Wet Seal adopted a shareholder rights plan in August, aimed at protecting itself from any takeover attempt. The rights plan was set to run through June 30, 2013.
The retailer said Thursday that it was getting rid of the rights plan based on feedback from shareholders and the board's confidence that its stock price is stabilizing.
Shares of the chain shed 2 cents to $3.12 in afternoon trading. The stock has traded between $2.42 and $5.08 over the 52 weeks, and started the day down about 4 percent for the year to date.
Last month Wet Seal hired the firms Guggenheim Securities LLC and Peter J. Solomon Co. to act as financial advisers on a variety of issues, including shareholder value. In addition, the board appointed a three-member committee tasked with making recommendations on spending and looking for ways to boost shareholder value.
The Foothill Ranch, Calif., company fired CEO Susan McGalla in July without naming a replacement. The retailer says its board is working with recruiter Korn/Ferry International to find a replacement CEO and expects to fill the post soon.
On Thursday, Wet Seal made tapped former CEO Kathy Bronstein to serve on its board. Bronstein served as Wet Seal's CEO for 11 years.
The company also appointed former Charlotte Russe CEO John Goodman as a director. Goodman most recently served as executive vice president of apparel and home at Sears.
The appointments man expand the size of Wet Seal's board to seven members.
Wet Seal says there are two additional directors that have said they are ready to join the board in coming months. The candidates have been approved by Wet Seal's nominating and corporate governance committees and been reviewed by the full board.
Wet Seal said the two additional directors, which were nominated by activist investor The Clinton Group, could join the board soon. The Clinton Group previously urged Wet Seal's board to sell the company.
Wet Seal said it has also proposed to let someone from The Clinton Group assist with the CEO search.
Wet Seal had 551 stores in 47 states and Puerto Rico as of Aug. 25.