Three Indy-area Wet Seal stores part of mass closings

January 7, 2015

The Circle Centre and Hamilton Town Center locations of struggling teen clothing retailer Wet Seal are among several Indiana outposts of the chain closing as a part of a massive pruning of stores.

The retailer said Wednesday it decided to close 338 stores—about two thirds of its total—after reviewing its financial condition and failing to negotiate meaningful concessions from landlords.

The closings are effective Wednesday, and are expected to result in nearly 3,700 full- and part-time workers losing their jobs.

Wet Seal has 12 locations in Indiana, four of which are in the metropolitan Indianapolis area. Representatives of two stores contacted by IBJ on Wednesday said the Castleton Square Mall location would remain open but stores at Circle Centre, Hamilton Town Center and Greenwood Park Mall would close.

A media contact for Wet Seal was not available to confirm the closings. Multiple calls to the Circle Centre and Greenwood Park Mall stores went unanswered.

The company warned Dec. 10 that it may file for bankruptcy protection if it did not resolve its cash issues after reporting another quarter of losses.

Fellow teen clothing retailers Delia's Inc. and Deb Stores filed for Chapter 11 bankruptcy last month, further evidence of business woes among traditional teen retailers. Delia's is closing stores in Circle Centre and at 14511 Clay Terrace Blvd. in Carmel.

Wet Seal and other chains are being hurt by stores like H&M and Forever 21 that are wooing the young with fast-changing selections of low-priced fashion. Teens are also more interested in outfitting themselves with the latest tech gadgets than new jeans.

"This was a very difficult decision to make, but after reviewing many other options since I returned to the company in September, our financial condition leaves us no other alternative than to close these stores," CEO Ed Thomas said in a statement issued Wednesday.

Thomas came back to Wet Seal as CEO after John D. Goodman resigned from the post. Thomas previously served as president and CEO of Wet Seal from October 2007 to January 2011.

Wet Seal, which was founded in 1962 and had long been a fixture at malls around the country, has struggled with an identity crisis for years.

"It couldn't decide what it wanted to be when it grew up," said Craig Johnson, president of Customer Growth Partners, a retail consultancy. He added, "It will be hard to see what the future is."

Wet Seal has had two consecutive years of losses as sales have declined.

In its fiscal third quarter, which ended Nov. 1, the company saw its losses nearly triple to $36.9 million. Net sales dropped 9 percent to $104.3 million.

The Wet Seal Inc. said that it estimates the stores closed represented about 48 percent of net sales for the nine months ended Nov. 1, 2014.

Wet Seal plans to keep 173 stores open in 42 states and Puerto Rico, as well as its online business.

The Foothill Ranch, California, company expects about $5.4 million to $6.4 million in charges related to the closings.


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