Wet Seal Scales Back Store Openings
The Wet Seal Inc. announced on May 22 cuts in its store-opening program for the rest of 2012, after the Foothill Ranch, Calif.–based retailer reported a decline in earnings for its first fiscal quarter of 2012.
Same-store sales declined 7.7 percent compared with last year. Same-store sales for the juniors-focused Wet Seal division declined 7 percent. The same-store sales for the company’s contemporary Arden B division declined 11.4 percent. Net sales for the entire company were $147.9 million in the first quarter of 2012, compared with $156.0 million in net sales last year.
Wet Seal Chief Executive Susan McGalla said the company will reduce its store-opening plan to 20 to 22 Wet Seal boutique openings for the rest of the year, a decrease from the 25 to 30 openings previously forecast. “This reflects a more selective approach to new-store development while we’re working on repositioning efforts at Wet Seal,” she said.
Real estate plans were scaled back for Arden B, as well. Arden B leases coming up for renewal will be allowed to expire, McGalla said, and the store count will drop from the current 84 stores to 64 to 69 stores.
“We have modified our Arden B real estate plans to focus entirely on turning around its merchandising and sales-productivity challenges,” she said. “This will allow us to put all efforts toward repositioning the brand. We are committed to the long-term future of Arden B and look forward to restoring strength in the business and resuming a growth trajectory.”
Wet Seal had planned to emphasize the sale of full-price merchandise at its e-commerce site, which had declined. However, McGalla said the e-commerce business is stabilizing and is poised to make a comeback.
For its second fiscal quarter, Wet Seal forecast a decline of 7 percent to 11 percent in its same-store sales.—Andrew Asch
