Wet Seal to Go Private

As of Thursday, April 16, 2015

An affiliate of Philadelphia-headquartered Versa Capital Management LLC announced April 15 that it completed its acquisition of troubled retailer The Wet Seal Inc. The deal was approved by the U.S. Bankruptcy Court for the District of Delaware on April 1.

The formerly public Wet Seal will be taken private and will operate under a new name, The Wet Seal LLC. The new company’s operations will be supported by a $15 million senior credit facility provided by Crystal Financial LLC, which is headquartered in Boston and maintains a Los Angeles office.

In many ways, the new Wet Seal will look like the old Wet Seal. It will keep the same headquarters in Foothill Ranch, Calif. It will continue to run a fleet of 173 Wet Seal stores and an e-commerce site (www.wetseal.com). It will be guided by the same executives who helmed the company immediately before the bankruptcy.

The leadership includes Ed Thomas, chief executive officer; Tom Hillebrandt, chief financial officer; Christine Lee, executive vice president and chief merchandising officer; Jon Kubo, executive vice president and chief digital officer; Kim Bajrech, senior vice president and general merchandise manager; and Rachel Page, Wet Seal’s vice president of stores and operations.

Thomas, who joined Wet Seal in September 2014 after serving as its president and CEO from October 2007 to February 2011, said that Versa would give Wet Seal the best support.

“We’re glad to be in business with a strong partner in Versa Capital,” Thomas said in a statement. “Our goal now is to further implement the strategies we developed when I returned to the business last September. Those plans call for optimizing the legacy of the Wet Seal brand and strengthening e-commerce as an important source of new customers and sales. We are focused on providing our growing customer base with fashionable merchandise that appeals to young women everywhere.”

Gregory L. Segall, Versa’s CEO and the new chairman of Wet Seal, said that the company had a distinguished past and a future full of opportunity. “The Wet Seal brand is more than 50 years old and, as such, carries a lifespan that few retailers can match. We believe the new strategy that Ed and his team have created will produce a bright future for this iconic retailer,” he said in a statement. Versa owns retailers such as Sports Chalet, restaurants such as Black Angus and community newspapers group Civitas Media. Versa’s investment strategy keep a focus on complex and distressed companies.

Wet Seal set up an entity called Seal 123 to wrap up pending legal matters and resolve creditor claims.