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Clinton Group Probes Buyout of Wet Seal

The activist investing firm upped its stake in the teen chain to 8.1 percent.

Activist investing firm The Clinton Group is exploring financing alternatives to take The Wet Seal Inc. private.

This story first appeared in the December 19, 2013 issue of WWD.  Subscribe Today.

The investor also upped its stake in the teen chain to 8.1 percent from the 7.8 percent reported in September.

According to a Schedule 13D/A filed with the Securities and Exchange Commission Wednesday, Clinton holds a total of nearly 6.9 million shares of Wet Seal’s Class A common stock. It also said it was considering making a “purchase of the equity of [Wet Seal] in a ‘going private’ transaction.”

Shares of Wet Seal rose 3.1 percent to close at $2.67 Wednesday in Nasdaq trading.

The activist firm has been pushing the teen retailer to make changes, including the sale of the company, since July 2012. The company did make one change: It hired John Goodman as its new chief executive officer in January, after firing former ceo Susan McGalla in July 2012.

Wet Seal earlier this month said it’s third-quarter loss widened slightly to $14.9 million, or 18 cents a diluted share, from a loss of $14.8 million, or 17 cents, a year ago. Sales were off 5.8 percent to $127.7 million, from $135.5 million a year ago. Comparable-store sales rose 0.8 percent as a 1.7 percent gain at the Wet Seal division offset a drop of 6.7 percent at the Arden B. unit.