Wet Seal Inc. said it is closing 338 stores and laying off 3,695 full and part-time employees “after assessing its overall financial condition” and failing to “successfully negotiate meaningful concessions from its landlords.”
The Foothill Ranch-based women’s apparel retailer will continue to operate 173 stores and its e-commerce business. The closed stores represented approximately 48% of its net sales for the nine months ended Nov. 1.
“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,” Chief Executive Ed Thomas said in a statement. “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.”
Wet Seal recently said it might “seek a restructuring or other relief under the provisions of the U.S. Bankruptcy Code” if it can’t address its immediate liquidity needs.
Its shares were up 32% at 7 cents and a market value of $6.3 million after the announcement Wednesday morning. That’s down from $2.50 per share and a market value of about $213.6 million a year ago.
