Wet Seal Offers, then Retracts Board Resignations

Activist investor Clinton Group is pushing a proxy proposal at the apparel retailer.

Clinton Group Inc. received the news it had been waiting for yesterday afternoon when teen apparel retailer Wet Seal Inc. called to concede a proxy contest for board seats. The victory didn’t last long.

At about 3 p.m., Wet Seal’s banker told Clinton “it appears you have won,” according to a U.S. Securities and Exchange filing today. The board members Clinton wanted to replace were ready to resign and assist with the transition, said the banker, who wasn’t named in the document. Clinton agreed to settle and began discussing a press release.

‘Reversing Themselves’

Retracting the resignations “is one more example of this board taking an important decision and then reversing themselves in short order,” Greg Taxin, a director at New York-based Clinton Group, said in an interview. “It further demonstrates their inability to make decisive moves as fiduciaries for the shareholders.”

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