Foothill Ranch, CA—As part of its strategy to regain its footing with younger consumers, Wet Seal Inc. said Friday it plans to phase out its Arden B stores, changing some to Wet Seal Plus merchandise.
The 54-unit Arden B chain generated about $60.4 million in sales year fiscal year, about 11% of Wet Seal Inc.’s total sales. Under the plan announced Friday, 31 Arden B stores will be changed to Wet Seal Plus and the remaining 23 doors will be moved to Wet Seal merchandise. Wet Seal currently has 478 stores.
“This was a difficult decision that followed a comprehensive review of the business and market dynamics,” said CEO John Goodman. “Our transition strategy for Arden B accelerates our opportunity to expand in the growing junior plus market.”
Following the changes, Wet Seal expects to see an annual pretax savings of about $1.3 million in its July quarter. The company anticipates completing the conversion before the back-to-school season.
The company also expects to close about 17 Wet Seal stores when their leases expire this year while opening10 new Wet Seal stores, mostly in outlet centers, by the end of the year. Nine Wet Seal locations closed and 13 new stores opened in the last quarter.
Like many teen-oriented retailers, Wet Seal has struggled to compete against fast fashion giants such as Forever 21 and H&M.
In its most recent fourth quarter earnings report, Wet Seal Inc. said net revenue fell 22.8% to $124.8 million. Comparable store sales fell 16.5% consisting of a 15.4% decline in comps at its Wet Seal stores and a 25% decline at Arden B.