* Clinton Group seeks turnaround, wants new CEO
* Company appoints Clinton nominee as chairman of board
(Adds details, background) By Chris Peters
Oct 10 (Reuters) - Activist investor Clinton Group said itwill no longer push for a sale of Wet Seal Inc , whichit won control of last week, but will instead focus on turningaround the women's clothing retailer.
The hedge fund, however, said Wet Seal could attract buyersif it managed to improve its business, and an offer of between$5-$8 per share would be a fair value for the company.
Clinton Group, which in June called for a sale of theretailer and is its third-largest shareholder with a 7 percentstake, said it is now hoping for a recovery under the new board.
Wet Seal named a Clinton Group nominee as chairman onWednesday, days after it managed to get four nominees elected tothe company's eight-member board. One seat remains vacant.
Lynn Davey, the new chairman, is the former chief executiveof Avalon Group Ltd, and will replace Harold Kahn, who resignedfollowing the Clinton Group's efforts to bring changes to theboard.
Clinton Group Managing Director Greg Taxin said Wet Seal,which has been hit by declining sales, should focus on hiring atop-notch chief executive and improve its business beforeconsidering a sale.
The retailer, which caters primarily to young women, firedCEO Susan McGalla in July as Clinton Group stepped up pressureto turn around the business.
"There is no definitive time frame set for a turnaround,"Taxin told Reuters on Tuesday, adding he expects the company tostart showing progress in about six to nine months.
He said Clinton Group had pressed for a sale earlier as WetSeal had fired its CEO without a replacement available and had"no clear strategic direction".
SEEKING A "FAST" REVAMP
Wet Seal has been trying to return to a fast-fashion modelby maintaining light inventories to respond quickly to newstyles and trends.
Wet Seal also announced late Friday merchandising chiefHarriet Sustarsic would be leaving the company to assume asimilar role at True Religion Apparel Inc .
Kim Bajrech and Debbie Shinn will lead Wet Seal'smerchandising operations, a responsibility they previouslyshared on an interim basis during a relatively successful periodunder the company's fast-fashion model before Sustarsic'sappointment.
Shares of the Foothill Ranch, California-based company,which have climbed 14 percent since it fired its CEO in July,were up 1 percent at $3.07 on the Nasdaq late morning onWednesday.
(Reporting By Chris Peters, Ranjita Ganesan and Maria AjitThomas in Bangalore; Editing by Saumyadeb Chakrabarty andSreejiraj Eluvangal)
Keywords: WETSEAL CLINTONGROUP/