Welcome!

News Feed Item

Clinton Group Commends Wet Seal for Focus, Financing and Future

NEW YORK, March 21, 2014 /PRNewswire/ -- Clinton Group, Inc. and its affiliates ("Clinton Group"), the owners of more than 7% of the outstanding common stock of The Wet Seal, Inc. ("Wet Seal")(NASDAQ: WTSL) sent a letter to the Chief Executive Officer of Wet Seal last night commending the Company for its recent actions, including its financing, in which Clinton Group was not involved.

"We believe Wet Seal is well positioned to emerge from the market-wide slowdown in teen apparel retailing significantly stronger than its competitors and better aligned with the teenage girl's shopping habits," said George E. Hall, Chief Executive Officer of Clinton Group. "With the financing announced yesterday, along with the recent Board changes, strategic moves on real estate and in the plus-sized market, and eCommerce and social media focus, Wet Seal is ahead of its competitors in executing on a fast-fashion, social-media centric retailing strategy that we believe is the wave off the future. We commend the management team for addressing the marketplace issues head on and for being proactive with this financing to ensure leadership for a long time to come."

The full text of the letter sent yesterday by the Clinton Group is below:

Clinton Group, Inc.

601 Lexington Avenue, 51st Floor

New York, NY 10022

 

March 20, 2014

Mr. John Goodman 
Chief Executive Officer 
The Wet Seal, Inc. 
26972 Burbank 
Foothill Ranch, CA 92610

RE:      Progress at Wet Seal

Dear Mr. Goodman:

I write on behalf of Clinton Group, Inc. and its various affiliates and associates ("Clinton Group"), which together own more than 7% of the outstanding stock of The Wet Seal, Inc. ("Wet Seal" or the "Company").

In light of today's earnings release, the announcement of strategic priorities, recent changes to the Board of Directors and the announcement of the Company's financing transaction, we write to commend you and the management team for taking the right steps in a very difficult macro environment for apparel retailers focused on teen clothing.

Although the recent results have not been laudable, we know they are primarily driven by market forces beyond the Company's control and that those forces will reverse in due course. Results among the mall-based peers have been weak, and in most cases worse. We also have taken note that most of your competitors are trying to move into the "fast-fashion" business, where the Company has long operated and has significant advantages, proprietary processes and seasoned infrastructure.

As Wet Seal's competitors aim to be more like Wet Seal, we know that Wet Seal itself continues to evolve and remain ahead of the pack. Indeed, we believe you have made many smart moves in last fifteen months -- improving merchandising, store operations, real estate strategy, technology, loyalty programs and the use of social media -- that will keep you ahead of the competition even as they attempt to emulate the Wet Seal fast fashion model.

Despite these many improvements in the Company's foundation and infrastructure, and the positioning of the Company in the "fast fashion" sector where all other teen retailers wish to be, the stock is down significantly since the summer of 2013. The price decline is unwarranted and will likely reverse sharply once the macro environment improves.

The $27 million financing announced tonight will surely give confidence to even the most skeptical supplier and positions the Company to expand aggressively its plus-sized business and its eCommerce and social media operations, further ensuring the Company is one of the market leaders on the other side of this market trough. With capital in hand, and a plan to expand the Company's market positioning, technology and social media marketing (with the help of the three new experienced Board members), we are confident in the Company's direction, capabilities and future.

Wet Seal stands ready to monetize the convergence of social media and eCommerce, and to extend its strategy profitably beyond the traditional mall-based retailing of its past. We are pleased with the steps management has made to address an altering landscape, including the building of outlet stores with a significant return on capital, an increased focus on plus-sized clothing and rationalizing stores in underperforming malls.

With some additional spending by teenage girls, which is inevitable, the Company will emerge from this market downturn stronger and better than it was when the stock was at $5.

While the immediate past performance has been disappointing, we commend you and the Board for facing the issues head-on and working proactively to position the Company well for the future.

We look forward to working with you constructively to ensure a bright future for Wet Seal and all its shareholders.

Sincerely,

//s//

George E. Hall

Chief Executive Officer

About Clinton Group,Inc.

Clinton Group, Inc. is a diversified asset management firm that is a Registered Investment Advisor. The firm has been investing in global markets since its inception in 1991 with expertise that spans a wide range of investment styles and asset classes.

 

SOURCE Clinton Group, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
The essence of data analysis involves setting up data pipelines that consist of several operations that are chained together – starting from data collection, data quality checks, data integration, data analysis and data visualization (including the setting up of interaction paths in that visualization). In our opinion, the challenges stem from the technology diversity at each stage of the data pipeline as well as the lack of process around the analysis.
What a difference a year makes. Organizations aren’t just talking about IoT possibilities, it is now baked into their core business strategy. With IoT, billions of devices generating data from different companies on different networks around the globe need to interact. From efficiency to better customer insights to completely new business models, IoT will turn traditional business models upside down. In the new customer-centric age, the key to success is delivering critical services and apps wit...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
Designing IoT applications is complex, but deploying them in a scalable fashion is even more complex. A scalable, API first IaaS cloud is a good start, but in order to understand the various components specific to deploying IoT applications, one needs to understand the architecture of these applications and figure out how to scale these components independently. In his session at @ThingsExpo, Nara Rajagopalan is CEO of Accelerite, will discuss the fundamental architecture of IoT applications, ...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit y...
In his session at 18th Cloud Expo, Bruce Swann, Senior Product Marketing Manager at Adobe, will discuss how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects). Bruce Swann has more than 15 years of experience working with digital marketing disciplines like web analytics, social med...
Enterprise networks are complex. Moreover, they were designed and deployed to meet a specific set of business requirements at a specific point in time. But, the adoption of cloud services, new business applications and intensifying security policies, among other factors, require IT organizations to continuously deploy configuration changes. Therefore, enterprises are looking for better ways to automate the management of their networks while still leveraging existing capabilities, optimizing perf...
Cloud computing changed data analytics for good. It enabled companies to drastically decrease resources and architecture previously assigned with business intelligence departments. It also enabled laymen to run advanced business analytics. Cloud was also the architecture of choice for storing and processing big data. Data piling is a continuous process, which is going to explode with emerging Internet of Things concept. Answer to this issue developers found in new concept called fog computing. ...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo New York Call for Papers is now open.
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will discuss the vast to...
Many banks and financial institutions are experimenting with containers in development environments, but when will they move into production? Containers are seen as the key to achieving the ultimate in information technology flexibility and agility. Containers work on both public and private clouds, and make it easy to build and deploy applications. The challenge for regulated industries is the cost and complexity of container security compliance. VM security compliance is already challenging, ...
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
SYS-CON Events announced today the How to Create Angular 2 Clients for the Cloud Workshop, being held June 7, 2016, in conjunction with 18th Cloud Expo | @ThingsExpo, at the Javits Center in New York, NY. Angular 2 is a complete re-write of the popular framework AngularJS. Programming in Angular 2 is greatly simplified. Now it’s a component-based well-performing framework. The immersive one-day workshop led by Yakov Fain, a Java Champion and a co-founder of the IT consultancy Farata Systems and...
Customer experience has become a competitive differentiator for companies, and it’s imperative that brands seamlessly connect the customer journey across all platforms. With the continued explosion of IoT, join us for a look at how to build a winning digital foundation in the connected era – today and in the future. In his session at @ThingsExpo, Chris Nguyen, Group Product Marketing Manager at Adobe, will discuss how to successfully leverage mobile, rapidly deploy content, capture real-time d...