US: The Wet Seal turnaround “already in motion”
- Q2 net loss of US$12.3m, versus $1.2m profit
- Net sales down 11.7% to $121.2m
- New CEO “to move quickly” to restore growth
The new CEO at troubled retailer The Wet Seal says he will “move quickly” to restore growth after the women’s wear business posted a loss in the second quarter.
Net sales fell 11.7% and comparable store sales declined 12.4% in the three months ending 2 August, with comps at The Wet Seal-branded stores down 11.1% and Arden B recording a 22.8% comparable store sales slump as the business was wound down.
Gross margins were down 780 basis points to 21.8%, thanks to lower merchandise margins and higher occupancy costs as a percentage of sales.
The US company’s new CEO, Ed Thomas, began his second stint at the helm of the retailer this week after former boss John Goodman resigned.
“Our second-quarter results were impacted by under-performance in several merchandise categories, ongoing weakness in mall traffic and the challenging promotional environment, which resulted in lower than anticipated comparable store sales and merchandise margins,” Thomas said.
“I plan to move quickly to analyse the business and develop an action plan to restore growth – in fact, those steps are already in motion.”
Teen apparel retailer The Wet Seal, a portfolio company of private equity firm Versa Capital Management, has named veteran retailer Melanie Cox as CEO....
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