CEO Roland Smith will retire and Troy Rice will oversee e-commerce as Office Depot’s new chief operating officer.
The teen apparel chain will use the cash to adjust to a “changing retail environment,” including lower mall foot traffic, in part by driving more e-commerce sales and growing its social and digital marketing, CEO John Goodman says. Net sales were down 22.8% in the fourth quarter, and down 8.7% in fiscal 2013, the retailer reports.
Teen apparel retailer The Wet Seal Inc., owner of the Wet Seal and Arden B brands, is making a push to grow in e-commerce following dismal fourth quarter and fiscal year end results. To bolster its efforts, the retailer has raised $27 million from a single institutional investor, that it did not identify in its announcement late yesterday.
The retailer says the funds are in the form of bonds that pay 6% annual interest through March 2017 and are convertible into common stock.
“This transaction enhances our capital structure at a time when our industry is challenged by a number of macro issues, most notably mall traffic and teen shopping patterns,” CEO John Goodman says. “We are embarking on a strategic plan designed to restore comparable-store sales growth, improve merchandise margins and strengthen our market position. We have a prudent capital spending plan for 2014 and will be deploying resources toward the significant opportunities we see to grow our e-commerce business, transform our real estate portfolio and expand our presence in the plus-size market.”
To further those initiatives, Wet Seal added three board members with expertise in social, digital and e-commerce, which Goodman says are “key areas of focus within our business.” In the fourth quarter, The Wet Seal opened 13 and closed nine Wet Seal stores and closed two Arden B stores, it says. Today it operates 532 stores in 47 states and Puerto Rico, including 475 Wet Seal stores and 57 Arden B stores.
“We are moving quickly to execute, and believe the new strategic direction will put us on a path to improving our financial results, stabilizing our operating cash flow and achieving long-term growth,” Goodman says.
The Wet Seal did not break out its web sales in its earnings reports, but says e-commerce accounted for just 6% of its total sales in 2012. It did not give the percentage for 2013. According to the most recent Internet Retailer estimates, it had 2012 web sales of roughly $35 million, up 25% from roughly $28 million in 2011.
For the fourth quarter ended Feb. 1, The Wet Seal reports:
- Net sales were $124.8 million, down 22.8% from $161.7 million in Q4 2012.
- A net loss of $27.5 million, compared with net loss of $85.8 million in the same period last year.
- Consolidated comparable-store sales were down 16.5%, including a same-store sales decline of 15.4% at Wet Seal and 25.0% at Arden B.
For the fiscal year 2013, also ended Feb. 1, the retailer reports:
- Net sales were $530.1 million, down 8.7% from net sales of $580.4 million in fiscal 2012.
- A net loss of $38.4 million, compared with a net loss of $113.2 million in fiscal 2012.
- Consolidated comparable-store sales declined 4.1%, including a decline of 3.6% at Wet Seal and 7.6% at Arden B.
The Wet Seal is No. 361 in the Internet Retailer 2013 Top 500 Guide.