CLINTON GROUP ID’S OPTIONS FOR WET SEAL: Activist investor Clinton Group sent a letter to The Wet Seal Inc.’s board highlighting options that are available to the teen retailer. The letter was sent by Joseph A. De Perio, Clinton Group’s senior portfolio manager.
Clinton Group said it recognized the swift efforts of Ed Thomas, chief executive officer, in right-sizing the business, but said too that “shareholders like us are wondering what to make of the company’s liquidity needs.” De Perio noted that there are alternate lenders who could displace Bank of America as the retailer’s asset-based lender, and pointed out that the announced equity financing transaction back in September still has not closed. He said that some of the institutions who committed to that financing might be interested in a PIPE transaction. Further, De Perio said other retailers could seek the retail footprint and infrastructure that the company possesses, and that there are probably a “number of strategic and financial investors that would back Mr. Thomas in a turnaround at Wet Seal.”
While not an outright call for a sale of the company, the letter did state that communication to shareholders has been “deficient and our hope is that this is remedied in the near future.” Clinton Group is also asking for the “timely completion of our recent books and records deman to examine the company’s shareholder list.”