Wet Seal To Close 338 Stores, Lay Off 3.7K Employees
FOOTHILL RANCH (CBSLA.com) — Teen clothier Wet Seal Inc. announced Wednesday it will close 338 of its stores, laying off some 3,700 full-time and part-time workers, leaving the struggling company with about 170 retail and online outlets.
"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," said chief executive Ed Thomas.
Once a shopping mall staple, Foothill Ranch-based Wet Seal has fallen on hard times, with its stock losing 98 percent of its value over the past year. With debt around $28.8 million, executives have come under fire for failing to pay employees, according to the Orange County Register.
On Wednesday evening, KCAL9's Erica Nochlin visited Westfield Fashion Square in Sherman Oaks, where the Wet Seal store is among those the clothier is closing. Most of the teen shoppers she spoke with did not seem to care about the store's demise.
"I only wore it when I was like in middle school," one girl said.
"It's very like busy, I like more solid colors," added another.
One of the girls mentioned Forever 21, Zara and Brandy Melville as three more popular choices among her friends.
The teens and an industry consultant agreed that Wet Seal could not keep up.
"They've always had the same style, and it got tacky, I think, at one point so I stopped shopping there," one of the girls said.
"The trends change at the speed of social media, and they have to have the operational infrastructure to service that change and that speed," said Argyle Company CEO Houman Salem, "Forever 21, for example, can come up with a new design and put it in the marketplace fairly quickly. One tweet, one Instagram picture, can change the season."
The girls said they are now more interested in technology than fashion trends,
Wet Seal plans to keep 173 stores open, including locations at Northridge Fashion Center and Del Amo Fashion Center, plus it will continue its online presence.
"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," Thomas said.
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