Wet Seal to take first quarter charge

Foothill Ranch, Calif. Wet Seal will take a first-quarter charge related to a notes and stock conversion and exercise of warrants, the women's clothing retailer said Thursday.

Wet Seal said it retired some secured convertible notes due in 2012 and its Series C preferred shares were converted into common shares.

CEO Ed Thomas said the moves simplify the company's balance sheet and eliminates limitations due to the notes indenture that included restrictions on Wet Seal's ability to repurchase its stock.

"While we have made no decisions regarding expansion of our recently completed stock repurchase program, the retirement of the notes provides us the flexibility to do so," he said.

The company said a holder of the notes, preferred shares and some of its warrants converted about $4.7 million of the notes into approximately 3.1 million shares of common stock last month. The holder also converted 1,611 shares of preferred stock into 537,000 common shares and exercised the warrants into 625,000 common shares.