Wet Seal drops rights plan, offers activist investor 2 board seats
Sept 20 |
Sept 20 (Reuters) - Wet Seal Inc said it terminated its shareholder rights plan and proposed to expand its board to include two nominees of activist investor the Clinton Group, who has called for a sale of the company.
Clinton, which owns about 7 percent of Wet Seal, had called for a sale of the women's apparel retailer and sought four seats on its board, soon after the company fired ex-CEO Susan McGalla in July.
Foothill Ranch, California-based Wet Seal adopted a rights plan with a 10 percent trigger a month later.
The company, which reported 12 straight months of declining same-store sales, is trying to return to fast-fashion retailing by maintaining light inventories to respond faster to new styles and trends.
Wet Seal expanded its board on Thursday to include former long time company CEO Kathy Bronstein and retail industry veteran John Goodman and said it had offered to add two more directors with retail experience from among Clinton's proposed slate.
The move to add board members and terminate the shareholder rights plan reflects feedback from shareholders and the board's confidence in the company's stabilizing share price, Wet Seal said in a statement.
Its shares have risen 18 percent since McGalla's firing. They closed at $3.14 on the Nasdaq on Wednesday.
In its ongoing discussion with Clinton, the company said it has among other things also offered to include the investor in the search committee looking for a new CEO.
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