Wet Seal (NASDAQ:WTSL) announced it will reduce its staff at the corporate offices by 24 percent and management level positions in the field by 20 percent. In total, the company will cut 78 jobs as the teen apparel retailer continues to be plagued by weak sales.
For the quarter, Wet Seal expects comparable same store sales, including e-commerce, to decline in the high teens, reported The Wall Street Journal.
"We have quickly begun to develop an action plan to stabilize the business," Edmond Thomas, CEO, told The Wall Street Journal. 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.
Thomas expects the changes made to impact in-store and online numbers by the first quarter.
Wet Seal estimates that restructuring charges will amount to $600,000 in the third quarter. And the cost-cutting effort will generate an annual savings of about $5.7 million, starting with the fourth quarter.
Wet Seal, like other teen retailers such as Abercrombie & Fitch, has struggled to compete with fast-fashion retailers such as Zara and H&M. As a result, the retailer chose to shutter its Arden B branded stores.
In an attempt to capture a new market share, this summer the retailer launched Wet Seal+, a new line of stores geared almost exclusively toward young plus-size shoppers.
-See this The Wall Street Journal article
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