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Dec 18 (Reuters) - 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 chairman.
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 season.
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 average. (Reporting by Maria Ajit Thomas and Mridhula Raghavan in Bangalore; Editing by Sriraj Kalluvila)