The Wet Seal, Inc. (Nasdaq: WTSLA), a leading specialty retailer
to young women, today announced that Kathy Bronstein, retail
consultant and former CEO of Wet Seal, and John Goodman, most
recently Executive Vice President of Apparel and Home at Sears and
former CEO of Charlotte Russe, have joined the company’s Board of
Directors, effective immediately. Ms. Bronstein and Mr. Goodman
bring extensive retail experience including expertise in fast
fashion merchandising.
“We are very pleased to welcome Kathy and John to our Board of
Directors,” said Hal Kahn, Chairman of the Board, and Sid Horn,
Chairman of the Nominating and Corporate Governance Committees.
“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 demographic. Kathy and John’s
insights will bring great value to the company as we continue to
work to revitalize the business and build value for
shareholders.”
Kathy Bronstein
Ms. Bronstein spent eighteen years at The Wet Seal, including 11
as CEO, and under her leadership the company increased its number
of stores from just over 100 to over 600 and revenues grew from
approximately $150 million to over $600 million. Most recently, Ms.
Bronstein has advised numerous large public and venture
capital-backed businesses, including Guess, Inc., Charlotte Russe
Holdings, Seven for All Mankind Jeans and Brighton.
“I am excited to be returning to Wet Seal as a Director,” said
Ms. Bronstein. “I look forward to helping the Board and our great
management team strengthen the brand and restore positive
comparable store sales and profitability at the company.”
John Goodman
Mr. Goodman also has direct women’s junior apparel and fast
fashion experience as the CEO of Charlotte Russe from 2008 to 2009,
when the share price more than doubled during his tenure. His
additional experience includes numerous senior leadership positions
at various large retail companies, including Sears, Kmart, Levi
Strauss and Gap. Most recently, he served as Executive Vice
President of Apparel and Home at Sears Holdings Corporation from
2009 to 2012.
Mr. Goodman said, “As a Director, I look forward to using the
experience I gained leading Charlotte Russe and during my time at
numerous other retail companies to help Wet Seal stabilize its
business, return to a fast fashion merchandising approach and build
long-term shareholder value.”
Possible Addition of Two Other New Board Members
The Wet Seal also announced today that two additional
independent Directors have indicated they are prepared to join the
Board in the coming months, both of whom have excellent retail
backgrounds. The two new Director candidates have been approved by
the company’s Nominating and Corporate Governance Committees and
have been reviewed by the full Board. One potential new Director is
prepared to join the Board as soon as a non-compete agreement with
her most recent employer expires or a waiver can be obtained. The
other potential new Director is prepared to join the Board after
Clinton Group’s consent solicitation is terminated or otherwise
resolved.
Mr. Kahn and Mr. Horn said, “During the last few weeks we
actively pursued a dialogue with our shareholders to listen to
their concerns and explain our strategy. We heard from our
shareholders that they would like to see an expanded Board with
additional retail experience to bolster our effective stewardship
of the company. We worked diligently to recruit highly qualified
candidates, and we believe that with the immediate addition of
Kathy and John, growing to seven members, and the possible
near-term addition of two more solid candidates, this Board will
contribute a strong combination of retail experience and fresh
perspectives to the company. Together with our existing Board
members, we will have the necessary stability and continuity to
carry out the execution of our strategy to return The Wet Seal to
our historically successful fast fashion business model.”
Changes to Board Committee Structure and Compensation
With the addition of Ms. Bronstein and Mr. Goodman as new Board
members, the company announced several changes to Board structure
and compensation.
The company announced that it has disbanded the Board’s
Strategic Oversight Committee and rescinded previously announced
additional compensation for the Committee’s members. The full
Board, including the new members, is empowered to determine and
execute upon an effective capital allocation plan and evaluate all
strategic initiatives to enhance shareholder value.
The Board also has reviewed the compensation and
responsibilities for Chairman Hal Kahn in his increased role during
this interim period while it searches for a CEO. The Board and Mr.
Kahn have determined that it is appropriate to reduce Mr. Kahn’s
overall compensation to reflect an expectation of a reduced level
of Mr. Kahn’s direct oversight during the last 90 days of this
fiscal year. Further details on these changes are available in the
Form 8-K filed today, which can be found on the company’s
website.
In addition, each Board member’s annual retainer will be reduced
by $25,000 beginning in Fiscal 2013.
Shareholder Rights Plan Terminated
The Wet Seal also announced today that it has terminated its
temporary shareholder rights plan, reflecting feedback from
shareholders and the Board’s confidence in the company’s
stabilizing share price and its ability to return to strong
performance under the fast fashion strategy beginning in the fourth
quarter.
Timetable for Annual Meeting
The Board has decided to move up the next shareholder meeting,
which will now be held no later than April 19, 2013. All Board
members are elected annually to one year terms.
CEO Search Continues
The Board is working actively with leading recruiter Korn/Ferry
to find a new CEO for The Wet Seal. The Board already has been
approached by a number of qualified candidates and is confident it
can successfully fill the role in the near-term.
Discussions with Clinton Group
In a separate filing today, the company referenced recent
discussions held between representatives of Clinton Group and the
company to determine whether a reasonable compromise could be
reached to avoid a long and protracted consent solicitation.
Following these discussions, the Board proposed to:
- Expand the Board to include two new
independent Clinton Group nominees and two new independent Wet Seal
nominees, all with significant retail expertise;
- Reorganize the CEO Search Committee to
include a Clinton Group nominee, a new Wet Seal nominee and a
current Board member;
- Reconstruct the Nominating Committee to
include Clinton Group nominees; and
- Disband the Strategic Oversight
Committee and transfer the responsibilities to the entire Board,
including new members.
“Neither the Board nor Wet Seal investors believe that a
prolonged proxy fight is in the best interests of the company or
our shareholders,” said Mr. Kahn. “Clinton Group’s unwillingness to
date to agree to a fair and reasonable compromise indicates that it
is not acting in the best long-term interests of all
shareholders.”
Mr. Kahn added, “We believe that our newly expanded board is
comprised of the right individuals with strong retail and business
experience to work with management to guide the company’s return to
its previously successful fast fashion model.”
For more information, please see the company’s investor
presentation that will be made available today on our website
www.wetsealinc.com.
About The Wet Seal, Inc.
Headquartered in Foothill Ranch, California, The Wet Seal, Inc.
is a leading specialty retailer of fashionable and contemporary
apparel and accessory items. As of August 25, 2012, the Company
operated a total of 551 stores in 47 states and Puerto Rico,
including 469 Wet Seal stores and 82 Arden B stores. The Company's
products can also be purchased online at www.wetseal.com or
www.ardenb.com.
For more company information, visit www.wetsealinc.com.
Safe Harbor
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: This news release contains forward-looking
statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include, but are not limited to, statements that relate to the
intent, belief, plans or expectations of the Company or its
management. All forward-looking statements made by the Company
involve material risks and uncertainties and are subject to change
based on factors beyond the Company's control. Accordingly, the
Company's future performance and financial results may differ
materially from those expressed or implied in any such
forward-looking statements. Such factors include, but are not
limited to, those described in the Company's filings with the
Securities and Exchange Commission. The Company will not undertake
to publicly update or revise its forward-looking statements even if
experience or future changes make it clear that any projected
results expressed or implied therein will not be realized.
Other Disclosures
The Company and certain of its Directors and executive officers
may be deemed to be participants in a solicitation of consent
revocations from stockholders in connection with the consent
solicitation by Clinton Group, Inc. The Company has filed a
preliminary consent revocation statement with the Securities and
Exchange Commission (the “SEC”) in connection with such consent
solicitation (the “Consent Revocation Statement”). Information
regarding the names of the Company’s Directors and executive
officers and their respective interests in the Company by security
holdings or otherwise is set forth in the preliminary Consent
Revocation Statement filed with the SEC. This document is available
free of charge at the SEC’s website at www.sec.gov.
If the Company files a definitive Consent Revocation Statement
with the SEC, the Company promptly will mail the definitive Consent
Revocation Statement and a form of consent revocation to each
stockholder entitled to deliver a written consent in connection
with the consent solicitation. WE URGE INVESTORS TO READ THE
CONSENT REVOCATION STATEMENT (INCLUDING ANY SUPPLEMENTS THERETO)
AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY FILES WITH THE
SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Stockholders will be able to obtain, free of charge,
copies of the definitive Consent Revocation Statement and any other
documents filed by the Company with the SEC in connection with the
consent solicitation at the SEC’s website at www.sec.gov.
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