Wet Seal considering second bankruptcy in two years
Two years after filing for Chapter 11 bankruptcy, Wet Seal is considering a second bankruptcy or sale. The American press reported that the retailer might announce its decision this week.
According to the Wall Street Journal, Wet Seal parent company Versa Capital Management is “considering liquidating all of its stores and solely operating as an online retailer.” Bloomberg added that Versa would prefer to make a deal out of court.
Wet Seal has struggled to turn its business around after being acquired by Versa in March 2015. The firm acquired Wet Seal for $7.5 million in cash.
Since the acquisition, Wet Seal appointed Melanie B. Cox as CEO and Judd P. Tirnauer as CFO, and the retailer closed up to 300 locations but it currently operates 171 stores in 42 states. In November, the retailer opened 13 holiday pop up shops at General Growth Properties shopping centers throughout the US.
The bankruptcy news follows The Limited’s store closures, and bankruptcy filings from retailer Nasty Gal, designer Bibhu Mohapatra, and yoga-inspired athletic company Yogasmoga. Fashion retailer American Apparel also closed its stores recently after Gildan withdrew its plans to acquire the company.
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