(Adds background; updates share movement)
Dec 18 Activist investor Clinton Group said it
was exploring financing options for a possible takeover of
women's apparel retailer Wet Seal Inc, sending the
company's shares up as much as 7 percent.
Clinton Group, which is the company's second-largest
shareholder, had dropped its push for a sale of the struggling
clothing retailer last year after winning four seats on the
company's board. The hedge fund's nominee is currently the
Wet Seal, which has a market value of about $219 million,
reported a 6 percent fall in third-quarter sales earlier this
month and warned of a challenging start to the holiday shopping
The company had been trying to return to a "fast-fashion"
model by maintaining light inventories to respond quickly to new
styles and trends.
"Fast-fashion" chains such as Inditex's Zara and
Forever 21 are increasingly attracting teen customers looking
for trendy clothing at affordable prices.
Wet Seal could not immediately be reached for comment.
Clinton Group and its affiliates had an 8.1 percent stake in
Wet Seal as of Dec. 17, up from 7.82 percent reported in
September, according to a regulatory filing on Wednesday. (r.reuters.com/tyn55v)
Wet Seal shares were unchanged at $2.59 on Wednesday
afternoon on the Nasdaq. More than 4.7 million shares changed
hands by 12:04 PM ET, nearly three times its 10-day moving
(Reporting by Maria Ajit Thomas and Mridhula Raghavan in
Bangalore; Editing by Sriraj Kalluvila)