Struggling clothing retailer Wet Seal Inc WTSLA.O urged its shareholders on Wednesday to reject efforts by its third-largest investor Clinton Group to gain control of the board, saying the company needed the experience of its current directors.
Clinton, which holds some 7 percent of Wet Seal, said the seller of young women's apparel had earlier in the day backtracked on an offer, made via an investment banker, for four directors to resign in exchange for the activist investor ending its move.
Clinton has argued that Wet Seal's performance over the last five years has been unnecessarily poor, and that the board has made missteps in its hiring and strategy.
The company's board has eight seats, of which one is vacant.
"We strongly urge our shareholders to revoke or withhold their consent to allow Clinton Group to replace six of the seven current members of our board, including our two recently added members, with five of their own candidates," Wet Seal chairman Hal Kahn said in a statement.
"We believe that maintaining a degree of stability and continuity on our board is critical as we approach the holiday season," Kahn said.
Wet Seal has in recent weeks expanded its board to include former chief executive Kathy Bronstein, and retail industry veteran John Goodman.
Clinton Group said the new appointments were better than any of the existing board, but insisted they were appointed hastily in a bid to fend off Clinton's campaign.
Wet Seal has struggled with declining sales for around a year, and on Tuesday reported a 12.7 percent decline in September same-store sales.
Shares in Wet Seal closed at $3.16 on Wednesday.
(Reporting by Siddharth Cavale and Avik Das in Bangalore; Editing by Edwina Gibbs)