CALIFORNIA, United States — Wet Seal Inc., the money-losing clothing chain that has said there is doubt it can continue operating, is closing about two-thirds of its stores and cutting almost 3,700 jobs after failing to win concessions from landlords.
The 338 stores that are shutting represented about 48 percent of its sales in the nine months ended Nov. 1, Foothill Ranch, California-based Wet Seal said today in a statement. The company said it expects to operate about 173 stores, along with its online business, after the closings are completed.
Wet Seal, an apparel retailer focused on young women, has been trying to trim costs as e-commerce and fast-fashion competitors, as well as slowing mall traffic, hurt sales. The company lost more than $150 million during the past two years.
The closings announced today will result in about $5.4 million to $6.4 million in pretax charges to write off inventory, impair assets and eliminate employees, Wet Seal said. The estimate doesn’t include claims landlords of the shuttered locations may make, the company said.
Wet Seal fell 7.8 percent yesterday to 5.5 cents in New York. The shares tumbled 98 percent last year.
By: Kevin Orland; editors: Nick Turner and Kevin Orland.