The company announced it will begin winding down the brand, which currently operates 54 stores and an online store. Wet Seal will close 31 Arden B stores by the end of fiscal 2015.
During the wind-down process 31 stores will transition to sell Wet Seal Plus merchandise, while the remaining 23 will shift to Wet Seal merchandise. The company plans to complete the transitions to other merchandise before back-to-school season in late July.
Wet Seal anticipates $3 million in charges in the first quarter of fiscal 2014 related to Arden B. The company also expects about $100,000 of charges for severance costs in the first quarter, and about $300,000 of charges in the second and third quarter for employee retention programs.
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TheStreet Ratings team rates WET SEAL INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate WET SEAL INC (WTSL) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself."