Content about Wet Seal

Philadelphia -- Wet Seal Inc. agreed to pay $7.5 million to settle a federal racial discrimination lawsuit that accused retailer of firing black employees because they didn’t fit the retailer’s “brand image.”
   
The NAACP Legal Defense and Education Fund represented the plaintiffs in the class-action effort. The lawsuit alleged that former top Wet Seal executives denied equal pay and promotion opportunities to black store managers or removed them outright, replacing them with white employees.

Foothills Ranch, Calif. -- The Wet Seal Inc. on Friday announced that its COO is resigning as the struggling retailer initiates a corporate workforce reduction as part of a broader cost-saving initiative. In other moves, it will shutter two poor-performing Arden B stores.

The struggling chain, which also authorized a $25 million stock buyback program, said president and COO Ken Seipel resigned effective immediately. His position will not be filled. Instead, Seipel's duties will be shared between CEO John Goodman and CFO Steve Benrubi.

Foothill Ranch, Calif. -- Wet Seal Inc. said Wednesday it has named Clinton Group nominee Lynda Davey as chairman of the board. Davey is the former chairman and CEO of Avalon Group Ltd. and will replace the recently departed Harold Kahn.

The announcement follows earlier news that four Clinton Group nominees joined the Wet Seal board of directors: Davey, Dorrit Bern, Mindy Meads and John Mills.

Foothill Ranch, Calif. -- The Wet Seal said that two independent proxy advisors, Institutional Shareholder Services and Egan-Jones Proxy Services, recommended that the chain’s shareholders reject efforts by Clinton Group to replace six members of the company’s board of directors.  

Foothill Ranch, Calif. -- On the heels of activist investor The Clinton Group’s announced plans to replace some of Wet Seal’s board members, the retailer is advising its shareholders against supporting the move.

Foothills Ranch, Calif. -- The Wet Seal Inc. said Thursday it has dropped its temporary shareholder rights plan, citing feedback from stakeholders, and has proposed to expand its board to include two nominees of activist investor Clinton Group.

In July, Clinton Group, which owns approximately 7% of Wet Seal, called for a sale of the retailer, expressing dissatisfaction with its performance, and made a play for four seats on the board. In response, the retailer adopted a temporary shareholder rights plan with a 10% trigger.

Foothill Ranch, Colo. -- The Clinton Group Inc., a 7% shareholder in Wet Seal, made a formal request on Monday to replace most of the retailer’s current board of directors.

Foothill Ranch, Calif. -- The Wet Seal said it has hired financial advisors and adopted a poison pill that discourages an investor from acquiring 10% of the company.

The move comes as Clinton Group, an investor with a 3.9% stake in the chain, has been putting pressure on the company to put itself on the block.

“We took this action to ensure the board has sufficient time to consider any option,” said Wet Seal chairman Harold Kahn.

Foothill Ranch, Calif. -- The Wet Seal reported Thursday that net income for the fourth quarter dropped to $1.1 million from $5.3 million a year earlier. Sales in the quarter followed the same downward trend, as net sales fell to $163.2 million from $165.5 million, and same-store sales declined 5.5%.

Foothill Ranch, Calif. -- The Wet Seal reported Thursday that net income for the quarter ended July 30 rose to $2.2 million from $1.6 million.

Sales rose to $148.8 million, compared with $131.5 million a year earlier.  Same-store sales increased 6%, the strongest second-quarter comps since 2005, according to the company.

Looking ahead, Wet Seal said it plans to spend $17 million to $18 million in fiscal 2011 on construction of new stores or remodeling of existing stores upon lease renewals and/or store relocations.
 

Foothill Ranch, Calif. -- The Wet Seal reported Thursday that net income for the fourth quarter ended Jan. 29 dropped to $5.3 million, compared with $74.2 million in the year-ago period. Last year’s quarter included a non-cash tax benefit of $64.7 million.

Sales rose to $165.5 million from $151 million a year earlier. Same-store sales increased 2.3%. Same-store sales for Wet Seal increased 1.9% and for Arden B increased 4.8%.

New York City -- Many retailers reported solid January sales on Thursday, despite snowstorms that raged across the country during the month. On average, the retail sector reported same-store sales growth of 4.2%, according to Thomson Reuters, which far outpaced the average estimate of 2.7%, the group said.

The results, many of which surpassed Wall Street expectations, offer encouragement that the economic recovery is picking up speed.