Share this article:
Gordon Brothers Brands LLC in Boston, a 114-year-old restructuring and investment firm, bought the Wet Seal name and other intellectual property for $3 million during a March 2 auction, according to documents filed today in the United States Bankruptcy Court for the District of Delaware. The deal is pending final court approval.
“Despite the increasing challenges facing teen retailers, we at Gordon Brothers strongly believe in the long-term viability of the category,” Gordon Brothers President Ramez Toubassy said in a statement. “Our plan for Wet Seal is to rebuild and reposition the brand and develop a unique new business model to best position it for future success.”
Gordon Brothers bought the Irvine-based retailer’s social media profiles, brands, trademarks, domain names, an e-commerce platform and data on some 5 million customers. Its past investments include Polaroid, Bombay & Co. and Sharper Image.
It beat out Toronto-based YM Inc. Group of Cos.’s stalking-horse bid of $1.5 million. YM Inc. eventually made a $2.95 million offer after “20 rounds of competitive bidding,” according to an affidavit filed with the court by David Peress, executive vice president of Hilco IP Services LLC, which was retained as Wet Seal’s advisor in connection with the sale of its intellectual property.
Wet Seal filed for Chapter 11 bankruptcy protection for the second time on Feb. 2, and was taking steps to liquidate its assets—store-closing sales were slated to conclude this week.
“Thanks babe, it’s been real,” Wet Seal said in a message posted on its website. “We hope you had as much fun as we had and are ready for more! ... Continue to check us out and in the coming days we’ll share more on what’s ahead.”
The retailer reported 2016 revenue of $144.5 million and had 142 stores in 37 states. It closed 338 locations and laid off 3,695 full- and part-time employees in January 2015, just before filing for a prior Chapter 11 bankruptcy. It emerged several months later, under the ownership of Philadelphia-based private equity firm Versa Capital Management LLC.