Wet Seal Cuts 41 Jobs
Wet Seal Inc.’s comparable-sales performance has steadily improved in the past few months, jumping from a decline of 7 percent in September 2007 to an increase of 0.6 percent in December 2007. Yet Ed Thomas, the teen retailer’s chief executive, announced that he will cut staff positions to increase profitability.
On Jan. 25, Thomas said that Wet Seal will eliminate 41 jobs at the company and not fill an additional 10 vacant positions. It will also cut $1.8 million from its marketing budget. The marketing cuts will affect its print advertising campaigns.
There could be more cuts coming, said Jeffrey Van Sinderen, a retail analyst for Los Angeles–based B. Riley & Co.
“This is the first round,” he said. Thomas, who took the reins of the company on Sept. 6, 2007, has been making sound decisions in cutting costs, Van Sinderen said.
The staff reductions are expected to result in annualized pre-tax savings of approximately $4.3 million beginning in fiscal 2008. The company expects to incur a one-time charge of approximately $400,000 in its fiscal 2007 fourth quarter related to the elimination of the 41 positions. Affected employees were provided with severance packages. —Andrew Asch
