The Wet Seal Inc. tossed out its poison pill and rejiggered its board, but has yet to make peace with The Clinton Group Inc., the activist shareholder pushing for changes at the struggling chain.
Wet Seal beefed up its board, adding Kathy Bronstein, its former chief executive officer, and John Goodman, former ceo of Charlotte Russe and a former Sears Holdings Corp. executive.
The company said it was also working to name two other independent board members in the coming months.
“During the last few weeks, we actively pursued a dialogue with our shareholders to listen to their concerns and explain our strategy,” said Hal Kahn, chairman, and Sid Horn, chairman of the board’s nominating and corporate governance committees, in a joint statement. “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.”
The company, which is looking for a ceo, also disbanded the board’s strategic oversight committee and cut Kahn’s pay as his direct involvement in operations is expected to decrease.
Wet Seal said the removal of the poison pill, which would thwart a takeover, reflected “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.”
Clinton, which has pushed for the sale of the company, has also proposed a slate of directors, including Raphael Benaroya, Mindy Meads, Dorrit Bern and Lynda Davey.
“Neither the board nor Wet Seal investors believe that a prolonged proxy fight is in the best interests of the company or our shareholders,” Kahn said. “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.”
Shares of Wet Seal were flat at $3.14 in midday trading on Wall Street.