Teen apparel retailer Wet Seal (NASDAQ:WTSL) has filed for Chapter 11 bankruptcy protection in an effort to keep open its remaining stores.
The announcement comes a week after the chain said that it would shutter 338 stores, two-thirds of all locations.
Last month, Wet Seal warned that it might need to file for bankruptcy protection, strapped for cash after the holidays. Just before the big selling season, the retailer reduced its staff at the corporate offices by 24 percent and management level positions in the field by 20 percent. In total, the company cut 78 jobs.
CEO Edward Thomas had hoped that things would turn around by the first quarter of this year. Thomas recently returned to the helm after ex-CEO John Goodman stepped down in August. The company has been experiencing management shifts, including the re-hiring of Jon Kubo as executive VP and chief digital officer.
It has been a tough year for teen clothing retailers—competing with fast-fashion apparel makers and tech gadgets—Delia's and Deb Stores also recently filed for bankruptcy.
The company estimates its assets to be between $10 million and $50 million, reported the Associated Press. And liabilities are estimated to be between $100 million and $500 million. As of Monday, Wet Seal had about $31 million in cash.
But the company is not giving up yet. Although last spring it chose to shutter its Arden B branded stores, the retailer also launched Wet Seal+, a new line of stores geared almost exclusively toward young plus-size shoppers.
-See this Associated Press article
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