Delia’s and Deb Shops filed for bankruptcy in December. That’s 438 more vacant storefronts across America. Now Wet Seal will close at least 338 more stores, and likely all 500 when they file for bankruptcy in the next couple weeks. Then the biggie. RadioShack will end up closing 5,000 locations when they file for bankruptcy in the very near future. Once the financial results are reported in February for all the major retailers you will see announcements from Sears, JC Penney, Macys and many others closing hundreds or thousands of more stores. Sure sounds like a consumer driven economic recovery.
Wet Seal may be too late to stave off bankruptcy
Teen retailer is closing most of its stores and laying off staff
NEW YORK (MarketWatch)—Teen retailer Wet Seal Inc. said Wednesday it is shutting two-thirds of its stores as it races to shore up liquidity and keep its operations afloat. But it may be too late to avoid the fate of former rivals Delia’s and Deb Shops, which filed for bankruptcy protection in December.
Already, a lender on some of the company’s senior convertible notes has issued a default notice with a deadline of Jan. 12. Unless Wet Seal meets its obligations or strikes a new agreement, the company is facing bankruptcy, said former bankruptcy attorney David Tawil of hedge fund Maglan Capital.
“I don’t think that there is a good chance (of it surviving) unless there is a trick up someone’s sleeve that we haven’t seen yet,” Tawil told MarketWatch. “It has been a long time coming.”
Wet Seal didn’t respond to a request seeking comment.
Wet Seal said the store closings came after it failed to get concessions from its landlords. The retailer, once a destination for teen and college girls, has lost sales to other fast-fashion players such as Forever 21 and H&M.
The teen sector has generally underperformed the broader retail segment, and other companies including Aéropostale Inc. ARO, +2.23% and Pacific Sunwear PSUN, +4.55% also are expected to shut stores this year. The sector is battling the trend in which teens are shifting spending to electronics and other items over fashion.
Read: here are some fashion stocks to buy and to avoid in 2015.
Wet Seal CEO Ed Thomas, who returned in September after heading the company from 2007 to 2011, has admitted the company has gotten “off-track,” skewing toward a younger customer with too much basic merchandise.
Thomas has promised to return the chain to “a fast-fashion model with emphasis on fashion product” that provides “constant newness.” The company will focus on fashion assortments over basics and define its target customer as 18-24-year-old women.
But that may be too late. Wet Seal has lost money in eight of the past 10 quarters, and is expected to lose money the next two quarters, according to Retail Metrics. Its comparable sales dropped 11 of the past 13 quarters. Holiday-quarter sales are expected to slump another 9.7%, after a 14.% drop in the third quarter, Retail Metrics data showed. Cash and cash equivalents tumbled 37% to $19.1 million as of Nov. 1 from a year earlier.
Some employees on Wednesday posted signs in store windows, with the hashtag #forgetwetseal, complaining that the company didn’t give them any prior notice of the closures and they weren’t paid for unused vacation and sick time.
“It’s possible but very unlikely” it will survive, said Retail Metrics President Ken Perkins.
It will be an uphill battle, he said.
It’s horrible to base an economy on shit like this.
“Wet Seal”? I always thought it was a pet store!
I never heard of Wet Seal, wife said she heard of it, but not her type of store. Someone must have been having a wet dream to name a girs clothing store “Wet Seal.”.
Heard Dicks Sporting Goods may be going private. We have a new one in my city, and when you walk into it, it is like a morge.
@Welshman: I hear Dick’s are going into Wet Seals!
Do you know why lesbians shop at the Sports Authority? Cause they hate Dicks!
@Welshman: I go to Dicks about once a year just to peruse without buying anything. For the last several years I typically go around Thanksgiving. As I inevitably check out the witner outerwear, I literally come across the SAME jackets year after year. I mean exactly the same size jacket and brand that I have seen for several years. There is no mistake, as I actually look quite closely. In sum, all Dicks does is roll out the same crap year after year, literally. Although anecdotal, from what I can see is that the only thing they sell are the overpriced shoes that I buy online. I don’t know how this chain is still in business.
Never heard of Wet Seal, not a big loss for me. People tell me KMart is still kicking but I haven’t seen one in years. I travel quite a bit for work and haven’t even seen one. Where are they?
More signs of economic recovery:
PVH Corp. Announces Closing of Izod Retail Division
Published: Jan 7, 2015 4:00 p.m. ET
Completion Expected By End of Fiscal 2015
NEW YORK, Jan 07, 2015 (BUSINESS WIRE) — PVH Corp. [NYSE: PVH] announced today that it will close its Izod retail division, with the closing expected to be completed by the end of fiscal 2015. The closure of the retail business is not expected to impact the Company’s growing Izod wholesale business.
The Izod retail division currently operates approximately 120 stores. Approximately 20 stores will be converted to store formats under Calvin Klein and Tommy Hilfiger nameplates, with the remaining stores to be closed. The Company expects to record pre-tax charges in connection with the closure of approximately $40 million, half of which is expected to be non-cash. The charges relate principally to asset impairments, severance, inventory markdowns and lease exit costs.
Emanuel Chirico, Chairman and Chief Executive Officer of PVH Corp., said, “We have made the difficult decision to exit the Izod retail business, as it has become clear that its business model can no longer achieve acceptable return metrics as a result of the increasingly competitive environment driven by more premium brands in the outlet retail channel. The closing of our Izod retail division has no bearing on our Izod wholesale business strategy, which has shown great growth with our most recent launch at Kohl’s for the Fall 2014 season
There is a lot of shit happening. I don’t now how Mr Quinn keeps up with so much stuff.
FWIW – Last night I went to buy a calendar at my usual Office-whatever, and it was closed. I swear I was just there a few months ago. I did see where the empty former book store next door was now a Dollar-whatever.
I used the GPS to find another Office-whatever, it was mostly empty at 7:00 pm and that shopping center – in a good area of town – had two significant empty store fronts.
66 grocery stores closing in Philly, Pittsburgh
The Associated Press
PHILADELPHIA Dozens of discount grocery stores will soon be checking out of the Philadelphia and Pittsburgh areas.
Bottom Dollar Food says it will close 66 locations serving those cities by Jan. 15. The company said Friday that 2,200 affected workers will receive severance pay, and some will get job counseling.
Bottom Dollar’s parent company announced last month that it was selling the locations to the Aldi supermarket chain. The transaction had been expected to close in the first quarter of 2015.
Aldi has previously said it plans to expand operations in the United States, but has not committed to reopening the Bottom Dollar sites.
Bottom Dollar is operated by Delhaize America, a North Carolina-based subsidiary of Belgian parent company Delhaize Group.
Not surprised about Wet Seal. Their clothes are crap, sized for a petite 2 bulemic, and the stores are noisy and the service terrible. They deserve it.
I will cry a bit when RadioShack goes down. I love that store. The two stores in my area always have great staff and service, and most importantly, never make me feel like a complete moron about electronics when I wander in dazed and confused about that stuff.
JCPenney’s lost me years ago when their clothes & bedding went to shit, Sears tools & appliances quality fell off and Macy’s would never give me a credit card – so bad cess to them.
This, plus the implosion in oil prices, will make 2015 the Year of Financial Armageddon, IMHO.
But hey! As long as all these soon-to-be unemployed retail workers are NEVER COUNTED IN THE UNEMPLOYMENT STATS, the unemployment rate will never go above the current levels.
I guess if you don’t honestly quantify a problem, then it doesn’t exist, at least in the liberal progressive economic playbook.
@ Dutchman
HA!HA! Next time give a beverage alert, my coffee is all over my keyboard.
How Radio Shack has lasted this long is beyond me. No one seems to go to them anymore.
I wonder if granny yellen will be bailing out the shitty stores and the unemployed shale workers….I say no…. but she will bail out the people who loaned them money.
I live in L.A. and I often wonder about a fairly new store we have here called Fresh n Easy. It’s a wannabe competitor for Trader Joe’s. It has tried to appeal to the same crowd, but it falls short. Almost every time I go there are few people in there. I wonder how they are actually doing financially since they are not particularly cheap, nor do they have great quality.
You people aren’t seeing the big picture here.
When those thousands of stores close …. then tens of thousands of discouraged people will no longer seek employment ….. and so, unemployment decreases!! We will be at Full Employment in no time at all.
So simple a caveman can see it.
The big box office and sporting goods ghost towns have to be running on fumes. Too big, too empty, who came up with the make it in china and big box every category (while paying no wages or taxes) model economy anyway?
Spinalator
Fresh n Easy is Stale and bankrupt.
Fresh & Easy Neighborhood Market is a chain of grocery stores in the western United States, headquartered in El Segundo, California.[1] Since November 2013 it is owned by Yucaipa Companies.[2] It was a subsidiary of Tesco, the world’s third largest retailer, based in the United Kingdom.[3] It had plans for rapid growth – the first stores opened in November 2007 and, after a pause in the second quarter of 2008, the opening program recommenced. While there were over 200 stores in Arizona, California, and Nevada by December 2012, Tesco confirmed in April 2013 that it was pulling out of the US market, at a reported cost of £1.2 billion.[4] On September 10, 2013, Tesco announced they were transferring ownership and operations of more than 150 stores to supermarket-owner Ron Burkle’s Yucaipa Companies group.[5] Despite the sale of the stores, there will be a continued friends card program (www.freshandeasy.com/friends). Fresh & Easy Neighborhood Market Inc. filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court at the beginning of October 2013.[6] The sale will cost Tesco £150m, taking the total cost of its failed US venture to nearly £2bn.[7]
Tesco has been cooking the books for years, and Warren Buffet has not had kind words for them, as one of their biggest investors.
I don’t know Wet Seal but I will hate to see Radio Shack go down. Too many things that you can only buy at Radio Shack. Shows you how the current generation does not repair anything. Shame.
I will seriously miss the Radio Shack in my nabe. It’s right next to the el, it has friendly, knowledgeable clerks, and it has been my go-to place for headphones, rechargeable batteries, and I got a very good deal on a nice Canon camera there.
Wet Seal? Never go into the place- it is one more outlet for super-skinny 13-year-olds, that was birthed by the credit rampage of the past 30 years, like so many of the “specialty” chains that have caused our retail footprint to balloon from the 4-sq-ft-per-consumer average of 1964, to the ridiculous 42 square foot per consumer average as of 2010. I don’t remember there being any shortage of shopping venues in the 1960s.
While many younger folk see the inevitable contraction of retail back to levels that can be supported by consumers without resorting to obscene levels of debt, as economic breakdown, I see it as a return to normalcy. A lot of people on this site are wont to be nostalgic for the 50s and 60s, which really was an era of economic stability and unprecedented prosperity. However, most of these younger people were not alive then and do not remember how we really lived then. The lifestyles most well-off middle income folk lived in those days were Spartan relative to what people consider “normal” these days. The typical middle class house was a 3 bed 1 bath ranch or bungalow with space to park ONE car. Most families had only one car. My grandparents were affluent and STILL had only one bath in their Cape Cod house, and one car- my grandmother drove my grandfather to the rail stop to catch the commuter train in the morning and picked him up in the evening, and used the car for household errands during the day. If she went downtown to shop, she took the trolley. My young family’s first house was a cheap 3 bed 1 bath ranch, and we of course had only one car. I got two pairs of new shoes each fall- a pair of penny loafers for school and a pair of dressy shoes for Sundays and special occasions. I was the only girl in my high school who owned a good pair of kid gloves, and it was a rare girl who had more than 5 outfits.
Families hardly ever ate out. Better off people did that perhaps once a month, on Sundays, while people of average means did it once every 6 months, at a local “white tablecloth” restaurant with moderate prices. We thought we were very lucky because my grandfather took us to a nice restaurant every month. That was rare.
Ordinary people did not live in 2500 sq ft 4 bed 3 bath houses with spa tubs, and they did not have 3 cars parked in the driveway. And NOBODY but the rich ever, ever had a second home. Nobody but the rich had housekeepers, nannies, or gardeners. And even the rich would have only one servant, usually a maid who came 2 or 3 times a week, and the rich lived in smaller homes, usually 7,000 sq ft at the most, but more often 3000 sq ft or so, not the 50,000 sq ft mega-mansions of these excessive times.
We could actually contract a great deal and still live comfortably if we could realize that a lot of what we consider “normal” for middle class people is actually excessive, and would seem downright decadent to people living in the 50s and 60s.
I have worked at RadioShack for over 29 years. The down fall started when the britt ,Jullian Day, started taking everything from us. He almost drove Sears and Kmart out of business. Lucky for them he was kicked out.
Now I am out of a job with 3 kids and a house payment.
BUT the big boys are going to split over 3 million.
MUST BE DARN NICE!!
If you would have listened to the real people in the field we wouldn’t be in this mess!
No severance pay, No vacation EARNED back pay!
SCREWED!!!