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Wet Seal, dELiA*s, Cache and Body Central Are Zombie Retailers

Richard Collings
11/26/14 1:53 PM EST
It is a nightmare before Christmas for several zombie retailers as Black Friday, the biggest shopping day of the year, looms. Among the walking dead are Wet Seal, dELiA*s, Cache and Body Central, according to industry sources. These struggling apparel banners are hoping for an upshot in consumer spending during the holidays to give them some life. The challenges these store brands face as they enter the winter season are poor balance sheets, with dwindling access to cash, and few alternatives to raise additional capital to keep their businesses alive. And industry watchers say that while certain categories such as home-related products are likely to do well, apparel is expected to be highly promotional, relying on sales and coupons to attract customers, eating into profits. That's because teen apparel is increasingly competitive, over-saturated with new entrants such as fast fashion juggernauts Zara and H&M. With strong store brands, superior manufacturing and distribution, the latest trends, competitive prices and sleek modern stores, fast fashion has an advantage over other clothing purveyors. The old guard, represented by the likes of Wet Seal, dELiA*s, Cache and Body Central, are no longer seen as having viable brands, but merely as points of distribution, offering the same goods as everyone else. To compound a dire situation, consumers are shifting their discretionary dollars away from clothing to the latest electronic gadgets. It is in the gory details of these retailers' financial health that sources say could even provide the impetus for bankruptcy filings in a couple of cases, before Christmas morning arrives.
Stocks in this video: WTSLDLIABODYCACH

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