October 06, 2012
Ronald Friedman, Co-Leader, Retail/Consumer Products Industry Group, Quoted in Los Angeles Times Article "RETAIL; Takeover at Teen Clothier Wet Seal; The Chairman and Four Board Members are Ousted in a Coup Led by an Inves
By Shan Li
In a swift overhaul, top officials of troubled teen clothier Wet Seal Inc. -- including the chairman -- were ousted and replaced by board members handpicked by an activist shareholder that directed the coup.
The Foothill Ranch retailer, which operates about 550 mall-based stores under the Wet Seal and Arden B. brands, has been under attack for months by its third largest shareholder, New York City private equity firm Clinton Group.
The company has suffered 13 straight months of falling same-store sales, including a 12.7% drop in September.
Teen retailers have been squeezed during the recession as adults snap up jobs traditionally held by teenagers, who might shop at Wet Seal, said Ron Friedman, a retail expert at advisory and accounting firm Marcum in Los Angeles.
"They suffer the most because teens have less income," Friedman said. "The market is so competitive right now, so that is why you are seeing that the few good guys are doing well, but most are finding a difficult market right now."