Wet Seal to Close 338 Stores
Posted on January 8, 2015
Wet Seal, a retailer of young women's clothing, is struggling and will have to close 66% of its store. Wet Seal will close 338 stores. The company also cut 3,695 jobs.
The closures leave Wet Seal with 173 stores and its ecommerce business at wetseal.com. Wet Seal says the stores it is closing accounted for 48% of its net sales for the nine months ending on November 1, 2014.
Wet Seal CEO Ed Thomas said in a statement, "This was a very difficult decision to make, but after reviewing many other options since I returned to the Company in September, our financial condition leaves us no other alternative than to close these stores. This is an extremely difficult time for the entire Wet Seal team, and we are doing everything we can to protect the interests of all of our stakeholders, including our employees. We acknowledge and sympathize with how hard these recent events have been on our employees, both those staying with the Company and especially those who are leaving the Company this week."
Chain Store Age reports that slowing mall traffic and competition from fast fashion giants like Forever 21 and H&M are partly to blame for Wet Seal's retail woes. The retailer had warned it might need to file for bankruptcy in December. The store closings may help the company avoid taking the bankruptcy path if it can find a way to boost sales at its remaining stores and online.
Wet Seal's store closures follow on the heels of Delia's, a teen girl's clothing chain, which liquidated last month.