The Wet Seal, Inc. Elects Two New Independent Directors to Board
Kathy Bronstein and John Goodman Bring Significant Fast Fashion
Retail Experience to Wet Seal
Company Will Consider Adding Two Additional Independent Directors
With Retail Experience to the Board in the Near Term
Board Terminates Shareholder Rights Plan, Reduces Board
Compensation and Sets Advanced Timetable for Annual Meeting
FOOTHILL RANCH, Calif.--(BUSINESS WIRE)--
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.
The Wet Seal, Inc.
Steve Benrubi, 949-699-3947
or
Ken
Seipel, 949-699-4877
or
Media:
RLM Finsbury
Steven
Goldberg, 646-805-2027
or
Kate Foley, 646-805-2052
or
Analysts/Investors:
MacKenzie
Partners, Inc.
Dan Burch, 212-929-5748
or
Charlie Koons,
212-929-5748
Source: The Wet Seal, Inc.
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