Wet Seal to Consider Non-Mall Units
Executives at Foothill Ranch, Calif.–based juniors apparel retailer Wet Seal Inc. are rethinkingthe company’s real estate strategy and for the first time may open non-mall stores or units in less-expensive locations as a way to evade the high cost of rising rents at lifestyle and enclosed shopping centers.
Wet Seal executives made the disclosures during a Nov. 30 conference addressing third-quarter results in which Chief Executive Officer Ed Thomas said the company will reduce new-store growth from 15 percent to 5 percent next year, with most of the openings coming during the second half of 2008.
Company officials said they would not renew leases on 20 units expiring within the year and added that they will likely cancel plans for other stores because of issues relating to store size, rents and other factors.
In addition, the company expressed interest in opening new locations at Class B and C malls, as well as store locations outside of malls. Class B and C properties are generally older and located in less-desirable locations, but they typically feature low rents and are often targeted for upgrades.
Wet Seal, which operates 490 Wet Seal and Arden B. stores, posted a $3.3 million,or 4 cents per share, loss for its third quarter, which ended Nov. 3.—Robert McAllister
