The women’s clothing, footwear and accessory chain warned back on December 10, 2014 that it may file for bankruptcy protection if it did not resolve its cash issues after reporting another quarter of losses. Just a mere month later, in an effort to avoid bankruptcy, the company announced they would be closing two-thirds of its stores after reviewing its financial condition and failing to negotiate meaningful concessions from landlords.
The company announced yesterday morning that 338 store locations across the Nation would be closing. The abrupt closings result in 3,695 full and part-time employees losing their jobs with less than a one day notice. The closings leave the struggling retail chain with 173 retail stores open as well as its Internet business.
“Our financial condition leaves us no other alternative than to close these stores,” Chief Executive Ed Thomas said in a statement. “This was a very difficult decision to make.”
The chain has wrestled for years to define its identity; it acquired other merchants and rolled out new brands, but never managed to resonate for long with fashion-conscious shoppers. This resulted in lackluster sales performance at many of the chain’s locations. Wet Seal has had two consecutive years of losses as sales have declined. The retailer reports that although the 338 stores to be closed represent 66% of Wet Seal’s stores, they accounted for only 48% of the $316 million in net sales for the nine months that ended November 1, 2014. In its fiscal third quarter, which ended Nov. 1, the company saw its losses nearly triple to $36 million, compared with a loss of $12.5 million a year earlier.