US: Wet Seal to close stores amid Q1 profit loss
- Q1 net loss of US$273,000
- Net sales fall 5.2% to $147.9m
- Close at least 20 Arden B stores
Teen apparel retailer The Wet Seal has said it plans to close a number of Arden B stores and will reduce the amount of Wet Store shops it will open this year after posting a first quarter net loss.
For the quarter ended 28 April, the company swung to a net loss of US$273,000, compared to a profit of $8m the same period last year. The company posted an operating loss of $441,000, compared to $13.3m operating income last year.
Net sales fell 5.2% to $147.9m, while comparable store sales declined 7% and for Arden B decreased 11.4%.
CEO Susan McGalla said: "We are disappointed with our first quarter results and recent sales trends at both Wet Seal and Arden B. We are taking immediate actions to rebalance the assortments towards stronger selling categories."
As the leases of Arden B stores come up for renewal this year, the company said it will either seek short-term extensions or allow the lease to expire and close the stores. As a result, the number of Arden B stores will decline from 84 to 64 to 69 stores by the end of the year.
"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," McGalla said.
In addition, the retailer expects to open 20-22 Wet Seal stores, a drop from its prior plan of 25-30 stores. McGalla added: "This reflects a more selective approach to new store development while we're working on repositioning efforts at Wet Seal."
Looking forward, Wet Seal expects net loss per diluted share in the range of $0.03 to $0.06 for the second quarter compared to net income per diluted share of $0.02 in the prior year second quarter.
At 28 April 2012, the company operated 553 stores in 47 states and Puerto Rico, including 469 Wet Seal stores and 84 Arden B stores.
The following is a general roundup of US apparel and shoe retailers' October 2012 sales results....
The following is a general roundup of US apparel and shoe retailers' September 2012 sales results....
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