0000902664-14-001921.txt : 20140321 0000902664-14-001921.hdr.sgml : 20140321 20140321080213 ACCESSION NUMBER: 0000902664-14-001921 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20140321 DATE AS OF CHANGE: 20140321 GROUP MEMBERS: CLINTON GROUP, INC. GROUP MEMBERS: CLINTON MAGNOLIA MASTER FUND, LTD. GROUP MEMBERS: CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P. GROUP MEMBERS: CLINTON RELATIONAL OPPORTUNITY, LLC GROUP MEMBERS: CLINTON SPOTLIGHT MASTER FUND, L.P. GROUP MEMBERS: GEH CAPITAL, INC. GROUP MEMBERS: GEORGE E. HALL SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WET SEAL INC CENTRAL INDEX KEY: 0000863456 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-WOMEN'S CLOTHING STORES [5621] IRS NUMBER: 330415940 STATE OF INCORPORATION: DE FISCAL YEAR END: 0128 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-41525 FILM NUMBER: 14708300 BUSINESS ADDRESS: STREET 1: 26972 BURBANK CITY: FOOTHILL RANCH STATE: CA ZIP: 92610 BUSINESS PHONE: 7145839029 MAIL ADDRESS: STREET 1: 26972 BURBANK CITY: FOOTHILL RANCH STATE: CA ZIP: 92610 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CLINTON GROUP INC CENTRAL INDEX KEY: 0001134119 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 601 LEXINGTON AVE. STREET 2: 51ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2128250400 MAIL ADDRESS: STREET 1: 601 LEXINGTON AVE. STREET 2: 51ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D/A 1 p14-0972sc13da.htm THE WET SEAL, INC.

SECURITIES AND EXCHANGE COMMISSION  
Washington, D.C. 20549  
   
SCHEDULE 13D/A
 
Under the Securities Exchange Act of 1934
(Amendment No. 17)*
 

The Wet Seal, Inc.

(Name of Issuer)
 

Class A Common Stock, par value $0.10 per share

(Title of Class of Securities)
 

961840105

(CUSIP Number)
 
 

Marc Weingarten and David E. Rosewater

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

(212) 756-2000

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
 

March 20, 2014

(Date of Event Which Requires Filing of This Statement)
 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. [ ]

 

(Page 1 of 18 Pages)

______________________________

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 2 of 18 Pages

 

 

1

NAME OF REPORTING PERSON

Clinton Spotlight Master Fund, L.P.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

WC

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

Cayman Islands

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

1,500 shares of Class A Common Stock issuable upon the exercise of options

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

1,500 shares of Class A Common Stock issuable upon the exercise of options

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

1,500 shares of Class A Common Stock issuable upon the exercise of options

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

0.0%

14

TYPE OF REPORTING PERSON

PN

         

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 3 of 18 Pages

 

1

NAME OF REPORTING PERSON

Clinton Magnolia Master Fund, Ltd.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

WC

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

Cayman Islands

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

3,439,563 shares of Class A Common Stock

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

3,439,563 shares of Class A Common Stock

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

3,439,563 shares of Class A Common Stock

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

4.06%

14

TYPE OF REPORTING PERSON

CO

         

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 4 of 18 Pages

 

 

1

NAME OF REPORTING PERSON

Clinton Relational Opportunity Master Fund, L.P.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

WC

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

Cayman Islands

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock)

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock)

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock)

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

2.15%

14

TYPE OF REPORTING PERSON

PN

         

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 5 of 18 Pages

 

1

NAME OF REPORTING PERSON

Clinton Relational Opportunity, LLC

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

AF

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock)

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock)

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock)

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

2.15%

14

TYPE OF REPORTING PERSON

CO; IA

         
 
CUSIP No. 961840105SCHEDULE 13D/APage 6 of 18 Pages

 

1

NAME OF REPORTING PERSON

GEH Capital, Inc.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

WC

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

370,019 shares of Class A Common Stock

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

370,019 shares of Class A Common Stock

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

370,019 shares of Class A Common Stock

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

0.44%

14

TYPE OF REPORTING PERSON

CO

         

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 7 of 18 Pages

 

1

NAME OF REPORTING PERSON

Clinton Group, Inc.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

AF

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

5,873,992 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock)

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

5,873,992 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock)

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

5,873,992 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock)

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

6.93%

14

TYPE OF REPORTING PERSON

CO; IA

         

 

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 8 of 18 Pages

 

1

NAME OF REPORTING PERSON

George E. Hall

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

AF

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

United States

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

6,244,011 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock)

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

6,244,011 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock)

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

6,244,011 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock)

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

7.37%

14

TYPE OF REPORTING PERSON

IN

         

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 9 of 18 Pages

This Amendment No. 17 ("Amendment No. 17") amends and supplements the statement on Schedule 13D filed with the Securities and Exchange Commission (the "SEC") on August 30, 2012 (the "Original Schedule 13D"), Amendment No. 1 to the Original Schedule 13D, filed with the SEC on September 5, 2012 (“Amendment No. 1”), Amendment No. 2 to the Original Schedule 13D, filed with the SEC on September 13, 2012 (“Amendment No. 2”), Amendment No. 3 to the Original Schedule 13D, filed with the SEC on September 17, 2012 (“Amendment No. 3”), Amendment No. 4 to the Original Schedule 13D, filed with the SEC on September 19, 2012 (“Amendment No. 4”), Amendment No. 5 to the Original Schedule 13D, filed with the SEC on September 21, 2012 (“Amendment No. 5”), Amendment No. 6 to the Original Schedule 13D, filed with the SEC on September 27, 2012 (“Amendment No. 6”), Amendment No. 7 to the Original Schedule 13D, filed with the SEC on October 1, 2012 (“Amendment No. 7”), Amendment No. 8 to the Original Schedule 13D, filed with the SEC on October 3, 2012 (“Amendment No. 8”), Amendment No. 9 to the Original Schedule 13D, filed with the SEC on October 5, 2012 ("Amendment No. 9"), Amendment No. 10 to the Original Schedule 13D, filed with the SEC on October 22, 2012 ("Amendment No. 10"), Amendment No. 11 to the Original Schedule 13D, filed with the SEC on February 13, 2013 ("Amendment No. 11"), Amendment No. 12 to the Original Schedule 13D, filed with the SEC on June 25, 2013 ("Amendment No. 12"), Amendment No. 13 to the Original Schedule 13D, filed with the SEC on August 22, 2013 ("Amendment No. 13"), Amendment No. 14 to the Original Schedule 13D, filed with the SEC on September 17, 2013 ("Amendment No. 14"), Amendment No. 15 to the Original Schedule 13D, filed with the SEC on December 17, 2013 (“Amendment No. 15”), and Amendment No. 16 to the Original Schedule 13D, filed with the SEC on March 11, 2014 ("Amendment No. 16" and together with the Original Schedule 13D, Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment No. 11, Amendment No. 12, Amendment No. 13, Amendment No. 14, Amendment No. 15 and this Amendment No. 17, the "Schedule 13D") with respect to the Class A common stock, par value $0.10 per share (the "Class A Common Stock"), of The Wet Seal, Inc., a Delaware corporation (the "Issuer"). Capitalized terms used herein and not otherwise defined in this Amendment No. 17 have the meanings set forth in the Schedule 13D. This Amendment No. 17 amends Items 2, 3, 4, 5, 6 and 7 as set forth below.

 

Item 2. IDENTITY AND BACKGROUND
   
Paragraphs (a)–(c) of Item 2 are hereby amended and restated in their entirety as follows:

 

 

(a) This Schedule 13D is filed by (i) Clinton Spotlight Master Fund, L.P., a Cayman Islands exempted limited partnership ("SPOT"); (ii) Clinton Magnolia Master Fund, Ltd., a Cayman Islands exempted company ("Magnolia"); (iii) Clinton Relational Opportunity Master Fund, L.P., a Cayman Islands exempted limited partnership ("CREL"); (iv) Clinton Relational Opportunity, LLC, a Delaware limited liability company, which serves as the investment manager to CREL ("CRO"); (v) GEH Capital, Inc., a Delaware corporation ("GEHC"); (vi) Clinton Group, Inc., a Delaware corporation, which serves as the investment manager to SPOT and Magnolia (“CGI”); and (vii) George E. Hall, a United States citizen, who serves as Chief Executive Officer of CGI ("Mr. Hall" and together with SPOT, Magnolia, CREL, CRO, GEHC and CGI, “Clinton”).

 

(b) The principal business address of CRO, GEHC, CGI and Mr. Hall is 601 Lexington Avenue, 51st Floor, New York, New York 10022. The principal business address of SPOT, Magnolia and CREL is c/o Credit Suisse Administration Services (Cayman) Ltd., P.O. Box 2003 GT, Grand Pavilion Commercial Centre, 802 West Bay Road, Grand Cayman, Cayman Islands.

 

(c) The principal business of CRO and CGI is to provide investment management services to private individuals and institutions. The principal business of SPOT, Magnolia, CREL and GEHC is to invest in securities. The principal business of Mr. Hall is to serve as Chief Executive Officer of CGI.

 
CUSIP No. 961840105SCHEDULE 13D/APage 10 of 18 Pages

 

 

The name, citizenship, present principal occupation or employment and business address of each director and executive officer of CGI, SPOT, Magnolia, CREL, CRO and GEHC is set forth in Schedule A attached hereto. To the best of the Reporting Persons' knowledge, except as set forth in this statement on Schedule 13D, none of such individuals owns any shares of Class A Common Stock.

 

Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
   
Item 3 of the Schedule 13D is hereby amended and restated in its entirety as follows:
   
 

The Reporting Persons used approximately $18,949,000 (including brokerage commissions) in the aggregate to acquire the shares of Class A Common Stock reported herein as beneficially owned.

 

Funds for the purchase of the Class A Common Stock reported herein as beneficially held by Clinton were derived from (i) available working capital of SPOT, for the shares of Class A Common Stock held directly by it; (ii) available working capital of Magnolia, for the shares of Class A Common Stock held directly by it; (iii) available working capital of CREL, for the shares of Class A Common Stock held directly by it; (iv) available working capital of GEHC, for the shares of Class A Common Stock held directly by it; and (v) margin borrowings described in the following sentence, for the shares of Class A Common Stock held directly by SPOT, Magnolia, CREL and GEHC. Such Class A Common Stock is held by Clinton in commingled margin accounts, which may extend margin credit to Clinton from time to time, subject to applicable federal margin regulations, stock exchange rules and credit policies. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the account. The margin accounts bear interest at a rate based upon the broker’s call rate from time to time in effect. Because other securities are held in the margin accounts, it is not possible to determine the amounts, if any, of margin used to purchase the Class A Common Stock reported herein as beneficially owned by Clinton.

 

Item 4. PURPOSE OF TRANSACTION
   
Item 4 of the Schedule 13D is hereby amended and supplemented by the addition of the following:
 

 

 

On March 20, 2014, CGI sent a letter to John Goodman, Chief Executive Officer of the Issuer (the "Letter") in response to the Issuer's March 20, 2014 earnings release, announcement of strategic priorities, recent changes to the composition of the Board and announcement of the Issuer's financing transaction.  In the Letter, CGI, on behalf of itself and its affiliates, commended the Board and the Issuer's management team for taking the right steps in a very difficult macro environment for apparel retailers focused on teen clothing.  CGI noted that results have been weak among the Issuer's mall-based peers and that many competitors are attempting to move into the "fast-fashion" business, where the Issuer has long operated. CGI further noted that the Issuer was well positioned to take advantage of improvements in the macro environment and that the Issuer's raising of capital, addition of new Board members and strategic priorities, including improved merchandise margins, eCommerce growth, social media presence, real estate rationalization, and focus on the plus size market, were all commendable. On March 21, 2014, CGI issued a press release (the "Press Release") commending the Issuer for its recent actions, including its financing, and containing the full text of the Letter.

 

The foregoing summary of the Letter and the Press Release is qualified in its entirety by reference to the full text of the Press Release, which contains the full text of the Letter, a copy of which is attached as Exhibit 20 to this Schedule 13D and is incorporated by reference herein.

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 11 of 18 Pages

Item 5. INTEREST IN SECURITIES OF THE ISSUER
   
Paragraphs (a) – (c) of Item 5 of the Schedule 13D are hereby amended and restated in their entirety as follows:
   
 

(a) The aggregate number and percentage of shares of Class A Common Stock to which this Schedule 13D relates is 6,244,011 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock), constituting approximately 7.37% of the Issuer’s currently outstanding Class A Common Stock. The aggregate number and percentage of shares of Class A Common Stock reported herein are based upon the 84,722,419 shares of Class A Common Stock outstanding as of November 29, 2013, as reported in the Issuer's Quarterly Report on Form 10-Q for the period ended November 2, 2013 filed with the Securities and Exchange Commission on December 4, 2013.

   
  (i) SPOT:
    (a) As of the date hereof, SPOT may be deemed the beneficial owner of 1,500 shares of Class A Common Stock issuable upon the exercise of options.
      Percentage: Approximately 0.0% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0
      2. Shared power to vote or direct vote: 1,500 shares of Class A Common Stock issuable upon the exercise of options
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition: 1,500 shares of Class A Common Stock issuable upon the exercise of options
  (ii) Magnolia:
    (a) As of the date hereof, Magnolia may be deemed the beneficial owner of  3,439,563 shares of Class A Common Stock.
      Percentage: Approximately 4.06% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0
      2. Shared power to vote or direct vote:  3,439,563 shares of Class A Common Stock
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition:  3,439,563 shares of Class A Common Stock
   
  (iii) CREL:
    (a) As of the date hereof, CREL may be deemed the beneficial owner of 1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock).
      Percentage: Approximately 2.15% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0

 

      2. Shared power to vote or direct vote: 1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock)
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition: 1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock)
         

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 12 of 18 Pages

  (iv) CRO:
    (a) As of the date hereof, CRO may be deemed the beneficial owner of 1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock).
      Percentage: Approximately 2.15% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0
      2. Shared power to vote or direct vote: 1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock)
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition: 1,822,619 shares of Class A Common Stock (including options to purchase 1,600 shares of Class A Common Stock)
         
  (v) GEHC:    
    (a) As of the date hereof, GEHC may be deemed the beneficial owner of 370,019 shares of Class A Common Stock.
      Percentage: Approximately 0.44% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0
      2. Shared power to vote or direct vote: 370,019 shares of Class A Common Stock
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition: 370,019 shares of Class A Common Stock
   
  (vi) CGI:
    (a) As of the date hereof, CGI may be deemed the beneficial owner of 5,873,992 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock).
      Percentage: Approximately 6.93% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0
      2. Shared power to vote or direct vote: 5,873,992 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock)
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition: 5,873,992 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock)
   
  (vii) Mr. Hall:
    (a) As of the date hereof, Mr. Hall may be deemed the beneficial owner of 6,244,011 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock).

 

      Percentage: Approximately 7.37% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0
      2. Shared power to vote or direct vote: 6,244,011 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock)
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition: 6,244,011 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock)
   

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 13 of 18 Pages

 

(b) By virtue of investment management agreements with SPOT and Magnolia, its ownership of CRO, and a sub-advisory agreement governing a portion of a mutual fund portfolio ("CASF") that beneficially owns 610,310 shares of Class A Common Stock, CGI has the power to vote or direct the voting, and to dispose or direct the disposition, of all of the 5,873,992 shares of Class A Common Stock (including options to purchase 3,100 shares of Class A Common Stock) beneficially owned by SPOT, Magnolia, CREL and CASF. By virtue of his direct and indirect control of CGI and indirect ownership of GEHC, Mr. Hall is deemed to have shared voting power and shared dispositive power with respect to all Class A Common Stock as to which CGI and GEHC have voting power or dispositive power.

 

(c) All transactions in Class A Common Stock effected by the Reporting Persons since the filing of Amendment No. 16 are set forth in Schedule B hereto. Unless otherwise indicated, all such transactions were effected in the open market.

 

   
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
 
Item 6 of this Schedule 13D is hereby amended and supplemented as follows:
 

 

As of the date hereof, the Reporting Persons are party to option contracts on an aggregate of 404,500 shares of Class A Common Stock with strike prices ranging from $1.75 to $3.00 and expiration dates of March 22, 2014 and April 19, 2014.

 

The Reporting Persons are parties to an agreement with respect to the joint filing of this Schedule 13D and any amendments thereto. A copy of such agreement is attached as Exhibit 21 to this Schedule 13D and is incorporated by reference herein.

 

Other than as previously reported in the Schedule 13D, the Letter and the options described in this Item 6, there are no contracts, arrangements, understandings or relationships among the Reporting Persons or between the Reporting Persons and any other person with respect to securities of the Issuer.

 

Item 7. MATERIAL TO BE FILED AS EXHIBITS
 
Exhibit Description
20 Press Release, dated March 21, 2014
21 Joint Filing Agreement, dated March 21, 2014
 
CUSIP No. 961840105SCHEDULE 13D/APage 14 of 18 Pages

 

 

SIGNATURES

After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: March 21, 2014

 

  Clinton Spotlight Master Fund, L.P.
     
  By: Clinton Group, Inc., its investment manager
     
  By: /s/ Francis Ruchalski
  Name: Francis Ruchalski
  Title: Chief Financial Officer
     
     
  Clinton Magnolia Master Fund, Ltd.
     
  By: Clinton Group, Inc., its investment manager
     
  By: /s/ Francis Ruchalski
  Name: Francis Ruchalski
  Title: Chief Financial Officer
   
  Clinton Relational Opportunity Master Fund, L.P.
     
  By: Clinton Relational Opportunity, LLC, its investment manager
     
  By: /s/ John Hall
  Name: John Hall
  Title: Authorized Signatory
     
  Clinton Relational Opportunity, LLC
     
  By: /s/ John Hall
  Name: John Hall
  Title: Authorized Signatory
   
  GEH Capital, Inc.
     
  By: /s/ Francis Ruchalski
  Name: Francis Ruchalski
  Title: Comptroller
   
  Clinton Group, Inc.
       
 
CUSIP No. 961840105SCHEDULE 13D/APage 15 of 18 Pages

 

     
  By: /s/ Francis Ruchalski
  Name: Francis Ruchalski
  Title: Chief Financial Officer
     
     
  /s/ George E. Hall
  George E. Hall
   
   

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 16 of 18 Pages

Schedule A

 

Directors and Executive Officers of Certain Reporting Persons

 

CLINTON GROUP, INC.

 

The following sets forth the name, position and principal occupation of each director and executive officer of CGI. Each such person is a citizen of the United States of America. The business address of each director and executive officer is 601 Lexington Avenue, 251st Floor, New York, New York 10022.

 

Name Position and Principal Occupation
George E. Hall Director, Chief Investment Officer and President
Francis A. Ruchalski Director and Chief Financial Officer
John L. Hall Director

 

CLINTON SPOTLIGHT MASTER FUND, L.P.

 

Clinton Spotlight GP, LLC, a Delaware limited liability company, is the general partner of SPOT. George Hall is the controlling person of Clinton Spotlight GP, LLC.

 

CLINTON MAGNOLIA MASTER FUND, LTD.

 

The following sets forth the name, principal occupation and business address of each director of Magnolia. There are no executive officers of Magnolia. Each such person is a citizen of the United Kingdom.

 

Name Principal Occupation Business Address
Jane Fleming

Client Accountant of Queensgate Bank & Trust Company Ltd.

 

 c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands
Dennis Hunter

Director of Queensgate Bank & Trust Company Ltd.

 

c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands

 

Roger Hanson Director of dms Management Ltd. c/o dms Management Ltd., P.O. Box 31910 SMB, Ansbacher House, 20 Genesis Close, Grand Cayman, Cayman Islands

 

CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P.

 

Clinton Relational Opportunity GP LLC, a Delaware limited liability company, is the general partner of CREL. George Hall is the controlling person of Clinton Relational Opportunity GP LLC.

 

CLINTON RELATIONAL OPPORTUNITY, LLC

 

George Hall is the controlling person of CRO.

 

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 17 of 18 Pages

GEH CAPITAL, INC.

 

The following sets forth the name, position and principal occupation of each director and executive officer of GEHC. Each such person is a citizen of the United States of America. The business address of each director and executive officer is 601 Lexington Avenue, 251st Floor, New York, New York 10022.

 

Name Position and Principal Occupation
George E. Hall Director, Chief Executive Officer and President
Francis A. Ruchalski Director and Comptroller
John L. Hall Director, Chief Financial Officer, Secretary and Treasurer

 
CUSIP No. 961840105SCHEDULE 13D/APage 18 of 18 Pages

Schedule B

The following table sets forth all transactions with respect to the shares of Class A Common Stock effected since the filing of Amendment No. 16 by any of the Reporting Persons.  Except as otherwise noted, all such transactions in the table were effected in the open market through a broker.

Clinton Magnolia Master Fund, Ltd.

 

Date of Transaction Shares Purchased (Sold) Price per Share ($)
3/12/2014 1,208,621 1.89
3/13/2014 (34,349) 1.8175
3/13/2014 400 1.8625
3/13/2014 (5,000) 1.8287
3/18/2014 (13,500) 1.7143
3/18/2014 (13,957) 1.7536
3/18/2014 (40,500) 1.6945
3/18/2014 (13,490) 1.7039
3/19/2014 (87,600) 1.6747
3/19/2014 (15,200) 1.6624

 

Clinton Spotlight Master Fund, L.P.

 

Date of Transaction Shares Purchased (Sold) Price per Share ($)
3/12/2014 (1,208,621) 1.89

 

CASF

 

Date of Transaction Shares Purchased (Sold) Price per Share ($)
3/13/2014 40,000 1.8289
     

 

 EX-99 2 exhibit20.htm EXHIBIT 20

EXHIBIT 20

 

 

CLINTON GROUP COMMENDS WET SEAL FOR FOCUS, FINANCING AND FUTURE

 

 NEW YORK, Mar. 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.

 EX-99 3 exhibit21.htm EXHIBIT 21

EXHIBIT 21

 

JOINT FILING AGREEMENT
PURSUANT TO RULE 13d-1(k)

The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate.

DATE: March 21, 2014

 

  Clinton Spotlight Master Fund, L.P.
     
  By: Clinton Group, Inc., its investment manager
     
  By: /s/ Francis Ruchalski
  Name: Francis Ruchalski
  Title: Chief Financial Officer
     
     
  Clinton Magnolia Master Fund, Ltd.
     
  By: Clinton Group, Inc., its investment manager
     
  By: /s/ Francis Ruchalski
  Name: Francis Ruchalski
  Title: Chief Financial Officer
   
  Clinton Relational Opportunity Master Fund, L.P.
     
  By: Clinton Relational Opportunity, LLC, its investment manager
     
  By: /s/ John Hall
  Name: John Hall
  Title: Authorized Signatory
     
  Clinton Relational Opportunity, LLC
     
  By: /s/ John Hall
  Name: John Hall
  Title: Authorized Signatory
   
       
 
 

 

  GEH Capital, Inc.
     
  By: /s/ Francis Ruchalski
  Name: Francis Ruchalski
  Title: Comptroller
   
  Clinton Group, Inc.
     
  By: /s/ Francis Ruchalski
  Name: Francis Ruchalski
  Title: Chief Financial Officer
     
     
  /s/ George E. Hall
  George E. Hall