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The Wet Seal, AŞ Message Board

  • fabricone1 fabricone1 Oct 4, 2012 11:37 AM Flag

    Who really wins here ?

    It is clear that Khan had retired many years ago and used the office to supplement his retirement and bring a string of unsuccessful CEO candidates through to incrementally reduce the company's performance. Of course that was not the goal and I may be unfair to Kahn as he had at one time achieved a lot of success with Macy's East but this concept went down the drain on his watch and his felloe directors seemed to stay silent on the situation. I directly offered my help as an expert with 30 years proven successful retail results as a C-level manager to help solve this problem. After a letter and several unanswered phone calls I sold my shares at a small gain as the lack of interest in not taking a meeting really surprised me.
    In my opinion it is solvable but not building a strategy that the primary driver is fast fashion. Not a bad tactic but not really strategic. So Clinton wins and at this stage so be it. Other than a small pop to $5 which at this point probably looks great to many of the investors here it really is not enough. I question who will buy it as it sits with or without the Clinton Group running things. Where is the value ? Who really will create it ?
    What Private Equity group would really invest more than $3 net of the cash on the balance sheet for this collection of retail locations with virtually no brand value. That is correct . No brand Value. No back door for a new investor , other than some cash which will erode quickly if decisive and a strong business plan is not quickly established and executed at a level that has not been seen here in many years. So I believe the Clinton Group can not go it alone but it mabe very hard to find partners if proper due diligence is done. The net bottom line is that if you woke up tomorrow and there were no Arden B and No Wet Seal outlets who would miss them ? I think we all no the answer. is it hopeless ? Of course not but what is the outlook ?

    Sentiment: Sell

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    • Why would a CEO be compelled to take a meeting with a "C-level manager"?

      Sentiment: Buy

      • 1 Reply to pmoishe
      • The reason he should have responded was I am also a shareholder of 8000 shares. Certainly he was not compelled to take a meeting but he had my background which had explained proven results in turnaround and growth strategies of companies that were far more complex than this one. I sold my shares as he would not return calls. I made a small profit so I am ok with the ClintonGroup. I do not think there is a fast sell out here though as there are a lot of issues both marketing and strategic that must be put in place to turn this company around. If they can turn it around they will make more than from a PE buyout at the current state of affairs. The company has not been well managed for sometime and they have two concepts that do not work. One is even worse than the other but they both stink. In a relatively good retail time fram this year to develop consistent double digit losses is a lack of management and absence of strategy. I wbelieve the Clinton Group can add some value but I really do not know their operating team so I decided to sell but I might buy below 3 and gamble a little. For sure they will do better than Hal's gang . The only question is how much better.

        Sentiment: Hold

    • Don't get your logic here : you want to sell at 3, but you think there will only be a small pop to $ 5??
      (5 is just fine for me, its not for the old directors who remember the good old days).

      • 1 Reply to obliden
      • I really think it will take quite sometime to find that buyer at $5. Private Equity money is not stupid money. They do not want something that is totally broken for any kind of premium. Having said that if the Clinton Group can make the initial steps with their new Directors 5 or even more could be achieved. What I do not like is that the burn rate most probably will accerate as there has not been a real good house cleaning on inventory and it is very over valued at the current lprice level.

        I have cleaned up previous management messes before and it comes with a price . Cleaning it up is not the issue. What the new Directors and the operating team decide to do with it is the key issue. While there is a good cash position currently it is far from cash rich so a lot has to be done with very strong competition surrounding everyone of their units. Stores are just a box and that is ok but the company really does not have a Brand Image that will be useful for the long term. Two losing concepts. Can it be done ? Yes but it will not be easy or very pretty because the Clinton Group will be afraid to damage values further at this point. They are investors not operators and a strategy that just trys to preserve the value will be difficult from the current status of the business. I did extensive research and analytical studies to present to Mr. Kahn and the number one problem can not be solved without spending some money to rebuild this business.

        So in summary if the CG is successful you can see the $5 in 18 months +/_ but you mmight see low 2 level as well. There are better plays imo.

        Sentiment: Hold