Wet Seal Fires Its CEO
Troubled teen retailer The Wet Seal Inc. dismissed Chief Executive Officer Susan McGalla,who had been on the job for less than two years.
The company, based inFoothill Ranch, Calif., made the announcement on July 23.
The board of directors hasstarted a search for a new chief executive. In the interim, the company has setup an office of the chairman, led by Hal Kahn, the company’s non-executivechairman of the board.
Also, Ken Seipel, the company’spresident and chief operating officer, and Steve Benrubi, the company’s chieffinancial officer, will be co-principal chief executive officers and members ofthe office of the chairman until a new CEO is selected to helm the chain of 563 mall-based stores.
The retailer, whose two storenameplates are Wet Seal and Arden B.,has been having a tough time attracting customers. The company said it expectsits July same-store sales to decline 13 percent to 14 percent compared with thesame month last year. Same-store sales for the second fiscal quarter are predictedto drop 10 percent to 11 percent.
For the first fiscal quarter, ending April 28, Wet Seal had a net loss of $300,000, compared with a net incomeof $8 million for the same period last year. Sales for the first fiscal quarterthis year were $148 million, compared with $156 million last year.
Currently, Wet Seal estimatesits second-quarter loss before accounting for CEO severance costs will be 6cents to 7 cents a share as opposed to its initial guidance of a loss of 3cents to 6 cents a share.
McGalla joined Wet Seal inJanuary 2011. Previously, she had worked as chief merchandising officer andpresident of American Eagle Outfitters, where she was responsible for design, marketing, revenues and performance ofvarious brands. She led the development and launch of two of American EagleOutfitters' start-up brands, aerie and 77 kids. —Deborah Belgum
