Wet Seal (NASDAQ:WTSL) was able to increase its sales and cash flow 10% and 50% respectively in the three years leading up to 2012, but then everything fell apart. Operating statistics turned for the worse, comparable-store sales decreased 10% when compared to the fiscal year 2011, with sales per square foot declining at the same rate. The company revealed an operating loss, a little less than half of which was due to a non-cash asset impairment charge, but was largely due to weak business conditions. The stock price also declined 18% in 2012.
This led activist shareholder Clinton Group to intervene and successfully pressure the resignation of many members of Wet Seal's senior management as well as the...
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