A highly regarded hedge fund has swooped in to rescue a retailer-in-distress from bankruptcy with millions of dollars in financing, promising to close stores and take a hard look at the company's real estate.

This time around, it's not

Kmart

(KMRT)

, and unlike most of the recent hedge fund activity in the retail sector, Ed Lampert is not involved.

The company in question is

Wet Seal

(WTSLA)

, whose shares have risen 40% since Steve Cohen's S.A.C. Capital Management showed up Tuesday with $40 million to keep the teen-clothing chain alive.

In addition to the financing, Wet Seal said its chairman and chief executive, who failed to turn the ailing company around over the summer, resigned. Executive Vice President Joseph Deckop, who has held roles in finance and operations at companies such as Disney Stores and Victoria's Secret, was appointed interim chief executive. Wet Seal also brought retailing veteran Michael Gold onboard as a consultant. Gold has run more than 400 retail clothing stores in the U.S. and Canada.

Still, analysts see little hope in reviving the Wet Seal concept, which consists of moderately priced stores selling casual clothing, accessories and cosmetics in malls. The company lost $102 million in the second quarter alone, and S.A.C. has stated in filings that it would have to close a lot of stores to return the company to profitability.

So what does a legendary trading shop like S.A.C. see?

"The Wet Seal concept seems beyond repair to me and not worth salvaging," said Katherine Rice Galligan, an analyst with Aperion Group LLC. "I don't think it has much brand equity with its target market. The plan has to have something to do with Arden B. stores."

While Wet Seal has consistently hemorrhaged market share and posted sales declines for a year, company officials say its Arden B. division boasts month after month of double-digit revenue growth.

Howard Davidowitz, chairman of Davidowitz & Associates, said that any turnaround at Wet Seal probably involves dumping most, if not all, of the Wet Seal stores and focusing on the more successful Arden B.

"To me, this is not enough money to do something with Wet Seal," Davidowitz said. "This is enough money to try something with Arden B., and that's been the hope all along. The whispers I hear are that Wet Seal is working on some way to get out of these stores where they'll pay somebody to take them, or a liquidator will take them."

At this point, the company has provided investors with little information about its plans. Some analysts said the deal, which provides Wet Seal with $10 million off the bat in interim financing, is just keeping it out of bankruptcy while a new plan is hatched.

The company has burned through roughly $100 million in cash in the last year. S.A.C. disclosed a 6.4% stake in the company in early July after taking part in a $25.9 million placement the company closed at the end of June. In late September, Wet Seal got $8 million in a junior secured term loan from Back Bay Capital Funding LLC. Now the latest ante could be an effort by S.A.C. to avoid a big loss on its stake.

"I'm just wondering if they're trying to hedge their loss from the first time around," Galligan said.

In mid-October, word spread that Wet Seal was considering a sale of its Arden B. unit, and the chain's price tag was estimated as high as $100 million. Such high valuation signals the promise of some upside surprise at Wet Seal, but Rob Wilson, an analyst with Tiburon Research, said it's too early to tell and, at this point, not worth the risk.

"The hedge fund is in a hole," said Wilson. "They're praying for a turnaround."