Wet Seal Announces Capital Review, June Sales DeclineThursday, July 5, 2012
Foothill Ranch-based mall retailer Wet Seal Inc. plans to hire an investment banking firm to analyze the company's cash reserves.
The review, which the company said it does on a regular basis, is in response to shareholder inquiries.
Wet Seal had cash and cash equivalents of $148.1 million at the end of the April quarter and a recent market value of $295 million.
The company’s shares were up 3% in midday trading on Thursday for a market value of about $295 million.
Wet Seal operates 470 of its namesake stores for teen girls. The company's Arden B. chain for young women totals 83 stores.
The capital review announcement followed Wet Seal's June sales results, which were down 9%. Analysts on average expected a 7.7% decline for the month.
Both of the company’s divisions saw same-store sales losses. The Wet Seal division fell 8.5% last month; Arden B. fell 11.9%.
The June sales were in line with company expectations, according to Chief Executive Susan McGalla.
The company reiterated its guidance for the July quarter, projecting a loss between $2.7 million to $5.3 million with decreased same-store sales of 7% to 11%.