Wet Seal Rebrands After Poor Sales
In its guidance for its 2012 first quarter, juniors and women’s retailer The Wet Seal Inc. warned the company will report declines in same-store sales ranging from the mid to high single digits.
“The first quarter got off to a disappointing start,” said Jennifer Ehrhardt, Wet Seal Inc.’s vice president and corporate controller. She made the remarks during a March 22 conference call with Wall Street analysts in which the company discussed results for the fourth quarter for its 2011 fiscal year.
It was announced that the Foothill Ranch, Calif.–based retailer’s total same-store sales declined 5.5 percent in the last quarter of 2011. The company’s juniors-oriented Wet Seal division sales declined 4.6 percent. Its contemporary-focused Arden B division declined 11 percent.
For the fourth quarter, Wet Seal’s net sales were $163.2 million, compared with $165.5 million during the same quarter the previous year.
Fourth-quarter declines were partially blamed on staff turnover. Wet Seal’s tops buyer left the company in September, and the positions were only filled in mid-January. As a result, sales for the retailer’s tops business suffered. However, Susan McGalla, Wet Seal’s chief executive, said the 552-store retailer had deeper problems, which it would spend 2012 solving.
A brand crisis has been particularly hurting Wet Seal. “Customers are confused what Wet Seal stands for.” McGalla said. “Years of damage was done.”
During 2011 Wet Seal performed an audit where it found customers and its workers could not articulate what were the company’s strengths or its fashion point of view. The lack of a strong identity resulted in declining sales.
In mid-2012, Wet Seal plans to hold sessions where district and regional managers will be trained in Wet Seal’s new branding. Consumers will notice only very subtle changes. “It is an evolution, not a revolution,” McGalla said.
In late 2012, the company also will introduce a new store prototype, which management forecasts will increase store productivity.—Andrew Asch
