Versa Capital Management announced that one of its affiliates won the bid in auction for bankrupt retailer Wet Seal (NASDAQ:WTSL). The company will take over at least 140 of the chain's stores and spend $10 million in supporting operations.
The winning bid includes replacement debtor-in-possession financing, and the parties have entered into an asset purchase agreement, which they intend to submit to the court. In addition, Versa will pay $7.5 million in cash for unsecured creditors.
"We believe our agreement with Versa provides the best possible outcome for our creditors, employees, customers and other constituents," said Ed Thomas, CEO of Wet Seal. "We are focused on executing an orderly emergence from bankruptcy court supervision and collaborating with Versa to improve the operational and financial performance of the business."
Versa had been watching the shifting landscape in Wet Seal's retail category for a year. The company found that, among other retailers it had been surveying, Wet Seal was best positioned in the marketplace.
Wet Seal filed for bankruptcy protection earlier this year, announcing it would shutter 338 stores.
Unlike other recent teen retail chains that have been forced to completely shutter all stores, such as Deb Shops and Body Central Corp., Wet Seal filed for chapter 11 protection with plans to keep the company operating, reported the Wall Street Journal.
-See this Versa press release
-See this Wall Street Journal article
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