New York -- The Wet Seal Inc. encouraged its shareholders on Wednesday to reject efforts by its third-largest investor, Clinton Group, to gain control of the board, Reuters reported. The company's board has eight seats, of which one is vacant.
Clinton, which holds approximately 7% of Wet Seal, said retailer 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, according to the report.
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.
"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.”
Wet Seal on Tuesday reported a 12.7% decline in September same-store sales. 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, Reuters said.