Wet Seal CEO Vows to Retake Market Share
Net sales declined during juniors retailer Wet Seal Inc.’s fiscal fourth quarter, but Wet Seal Chief Executive Ed Thomas said his company has recovered from a long period of poor business and will reclaim some of its lost market share. He made these remarks during a March 25 conference call on the Foothill Ranch, Calif.–based retailer’s quarterly earnings.
Net sales were $151 million during the fourth quarter of 2009, compared with net sales of $154.9 million for the fourth quarter of 2008. Comparable-store sales, one of the most common measurements of a retailer’s health, decreased 4.5 percent for the whole company during the 2009 fourth quarter. Comparable-store sales for the retailer’s Wet Seal division decreased 6.7 percent; however, same-store sales for its Arden B division increased 8.8 percent during the fourth quarter.
The fourth-quarter turnaround at Arden B, matched with the entire company’s solid same-store-sales increase of 4.7 percent in February 2010, gave credence to Thomas’ comeback promise. Until February, Wet Seal had not reported a same-store-sales increase since December 2007.
Wet Seal’s sales started turning around because it changed merchandising strategies, Thomas said. Wet Seal recently got out of the business of selling fashions to young women and older teen-agers and focused its efforts on younger teen-agers, who are often overlooked by other retailers, Thomas said.
For its Arden B. division, the company cut prices for much of its merchandise by 25 percent to 30 percent in the past year. If business continues to improve for Arden B, Thomas said, the company will start scouting locations for new Arden B locations. A new Arden B store prototype is already in development, according to Thomas.
The company also hopes to reopen Wet Seal locations in malls where the juniors retailer had closed in 2005. Thomas forecast the company could eventually double the current size of the fleet of Wet Seal to more than 700 stores in malls across the United States.—Andrew Asch
