Wet Seal closings spare Las Vegas stores
Struggling apparel retailer Wet Seal Inc. said on Wednesday it laid off about 3,700 full- and part-time employees as it closed 338 stores.
But three stores located in the Las Vegas Valley are apparently not affected by the closings.
An employee who answered the phone the West Seal store at Galleria at Sunset, 1300 W. Sunset Road, in Henderson said, “We’re open for business as usual.”
Employees who answered the phone at Las Vegas Premium Outlets - South at 7400 Las Vegas Blvd. South and Boca Park at 8800 W. Charleston Blvd. also said those stores remained opened.
The Reno Gazette-Journal reported for a story on its website that the Reno location at Meadowood Mall is one of the closed stores.
The company has warned that it could file for bankruptcy protection if it failed to meet immediate liquidity needs.
Many teen apparel retailers have been struggling with their customers’ switch to fast-fashion brands such as H&M, Forever 21 and Inditex’s Zara, which bring the latest styles from the runway to their stores within weeks.
Online retailers such as Amazon.com Inc. have also been luring customers by offering deeper discounts.
Delia*s Inc and private equity-owned Deb Shops filed for Chapter 11 bankruptcy protection last month.
A U.S. Bankruptcy Court on Wednesday granted Deb Shops approval to initiate going-out-of-business sales, which would result in the closure of about 300 stores, the Wall Street Journal reported.
Wet Seal, which has reported slowing year-on-year sales growth for the past five quarters, said the closures follow the failure to re-negotiate meaningful concessions from landlords.
A year ago, Wet Seal had 7,413 full- and part-time employees.
The closed stores accounted for almost half of Wet Seal’s net sales of about $317 million in the nine months to Nov. 1.
The retailer, which is also exploring strategic and financial alternatives, is now expected to operate 173 stores.
The closures will result in pre-tax charges of $5.4 million-$6.4 million, the company said.
California-based Wet Seal’s stock had lost about 98 percent of its value in 2014. On Wednesday, shares gained 7.2 cents, or 130.73 percent, to close at 12.7 cents.
The Las Vegas Review-Journal contributed to this report.
