* Clinton Group seeks turnaround, wants new CEO
* Company appoints Clinton nominee as chairman of board
* Wet Seal CFO says no definite time period for CEOappointment
* Wet Seal CFO expects "meaningful progress" in holidayseason sales
(Adds Wet Seal CFO comments, bullets, details; updates shares)
By Chris Peters and Ranjita Ganesan
Oct 10 (Reuters) - Activist investor Clinton Group said itwill no longer push for the sale of women's clothing retailerWet Seal Inc after winning control of the board lastweek, but will instead focus on turning the company around.
The hedge fund, however, said that Wet Seal could attractbuyers if it managed to improve its business, and an offer ofbetween $5.00 and $8.00 per share would represent fair value.
The stock closed at $3.02 on the Nasdaq on Wednesday,valuing the company at about $272 million.
"At this point there is no indication as to what directionthe board is going to decide to go with ... working with bankersor anything like that," Chief Financial Officer Steven Benrubitold Reuters on the phone.
Wet Seal named Clinton Group nominee Lynn Davey as chairmanon Wednesday. Davey was one of four Clinton nominees named asdirectors last week, ending a battle for control of theeight-member board.
One board seat remains vacant and the company still lacks achief executive. Davey, the former CEO of Avalon Group Ltd,replaces Harold Kahn.
Wet Seal's share price has fallen 30 percent over the past12 months on concerns the company's poor performance and thefrequent management shakeups meant to remedy the situation.
The retailer, which caters primarily to young women, hasbeen struggling to woo fashion-conscious teenagers at both itsArden B and Wet Seal chains.
"The only way they are going to fix the company is to get anew CEO who is going to put together a team of merchants who canget sales going," said Howard Davidowitz, chairman of Davidowitz& Associates Inc, a New York City-based retail consulting andinvestment banking firm.
Wet Seal fired CEO Susan McGalla in July as Clinton Group,the company's third-biggest shareholder, stepped up pressure onmanagement to perform.
Davidowitz said the company needs to find a CEO quicklybefore its cash runs out. Wet Seal had cash and equivalents of$148 million as of April 28, according to a regulatory filing.
CFO Benrubi, who shares interim control with Chief OperatingOfficer Kenneth Seipel, did not provide a definite time-periodfor finding a CEO but said clarity about the board's compositionwill help with the process.
Clinton Group, which holds 7 percent of Wet Seal, said thecompany should focus on hiring a top-notch chief executive andimprove its business before considering a sale.
"There is no definitive time frame set for a turnaround,"Clinton Group Managing Director Greg Taxin told Reuters, addinghe expects the company to show progress in six to nine months.
SEEKING A "FAST" REVAMP
Clinton Group had previously pressed for a sale because WetSeal had fired its CEO without a replacement available and hadno clear strategic direction, he said.
Bob Phibbs, CEO of consulting company The Retail Doctor,said the California brand that was trendy in the 1970s and 1980swould need to get younger members on the board to help bringabout changes that will attract potential bidders.
"Nobody wants to buy a damaged brand," he said, adding thatWet Seal should reduce its footprint and better train its storestaff to boost the business.
Wet Seal, which has been trying to return to a fast-fashionmodel by maintaining light inventories to respond quickly to newstyles and trends, said last week that merchandising chiefHarriet Sustarsic would leave to assume a similar role at TrueReligion Apparel Inc .
True Religion, another retailer hit by falling salesfollowing a series of fashion missteps, said on Wednesday it maysell itself after attracting interest from potential buyers.
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.
Benrubi said the company spent the third quarter restoringelements of the fast-fashion model and expects meaningfulprogress in the holiday season sales as a result.
(Additional reporting by Maria Ajit Thomas in Bangalore;Editing by Saumyadeb Chakrabarty and Sreejiraj Eluvangal and TedKerr)
Keywords: WETSEAL CLINTONGROUP/