Business & Real Estate

Cash-strapped Wet Seal closing stores nationwide, including Arden Fair and Galleria

Wet Seal, the California-based retailer specializing in clothing for teen girls and young women, is reportedly closing its stores nationwide, including stores at Arden Fair in Sacramento and the Westfield Galleria in Roseville.
Wet Seal, the California-based retailer specializing in clothing for teen girls and young women, is reportedly closing its stores nationwide, including stores at Arden Fair in Sacramento and the Westfield Galleria in Roseville.

Financially struggling Wet Seal, the California-based retailer specializing in clothing for teen girls and young women, will close its stores nationwide, including two area sites, in the coming weeks.

Wet Seal filed for Chapter 11 bankruptcy protection in January 2015. It was bought by Versa Capital Management

The chain will shutter all 171 of its remaining stores in 42 states. Wet Seal has stores in the Arden Fair mall in Sacramento and in the Westfield Galleria at Roseville.

Although Wet Seal officials had not yet confirmed the upcoming store closures by Friday afternoon, store employees confirmed the reports.

Also, a standard “WARN Act letter” sent to the state Employment Development Department, dated Jan. 20, informed EDD of upcoming layoffs of 148 employees at its Irvine headquarters.

Unfortunately, the company was unable to obtain the necessary capital or identify a strategic partner, and was recently informed that it will receive no further financing for its operations.

WARN Act letter sent by Wet Seal to the state Employment Development Department, dated Jan. 20

In a copy of the letter obtained by The Sacramento Bee, Michelle Stocker, vice president and general counsel, wrote that Wet Seal’s California headquarters in Irvine “will be permanently closed and all employees terminated on or before March 21, 2017, or within a 14-day period thereafter.”

The letter added: “This decision comes only after the company had been actively seeking capital and exploring reasonable restructuring opportunities and believed that it would continue to obtain financing to allow operations into the foreseeable future. Unfortunately, the company was unable to obtain the necessary capital or identify a strategic partner, and was recently informed that it will receive no further financing for its operations. As a result, the company has no alternative but to proceed with an orderly liquidation.”

Wet Seal filed for Chapter 11 bankruptcy protection in January 2015. At that time, the retailer said it planned to close 338 stores and lay off nearly 3,700 employees. It was subsequently bought by Philadelphia-based Versa Capital Management, but Wet Seal’s shopping mall-heavy foundation struggled against larger retail competitors and online retailers.

Mark Glover: 916-321-1184, @markhglover

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