Beleaguered teen retailer Wet Seal appoints two new directors
Beleaguered teen retailer Wet Seal Inc. appointed two new company directors Thursday as it tries to fend off an activist shareholder unhappy with its poor performance.
The Foothill Ranch retailer also abandoned a temporary shareholder rights plan adopted in August intended to discourage a takeover attempt.
The company, which operates about 550 stores under the Wet Seal and Arden B. brands for young women, fired its chief executive, Susan McGalla, in July without an immediate replacement amid plummeting sales and a discrimination lawsuit filed by former managers. Shares of Wet Seal fell 3 cents, or 1%, to $3.11 on Thursday.
The two new directors are John Goodman, a former chief executive of Wet Seal rival Charlotte Russe, and Kathy Bronstein, a former Wet Seal CEO who was fired in 2003. Bronstein was ultimately paid more than $3 million by Wet Seal to settle her claims of wrongful termination, gender discrimination and fraud, among other things. Calls to Bronstein and Goodman were not immediately returned.
“We’re excited to have new additions to the board who have demonstrated significant success leading companies that sell to Wet Seal’s specific young teen customer,” Chairman Hal Kahn said.
Wet Seal also said Thursday that it would consider adding two more directors nominated by the Clinton Group, a New York investment firm that holds a nearly 7% stake in the retailer and has been calling for drastic measures to turn around the company.
