Revenue increased 11.9% in Q1 of 2015, to $17.26 billion compared with $15.42 billion in the year-ago period.
The women’s specialty apparel retail chain is closing Arden B as part of a broader turnaround plan that includes a goal of generating 10% of sales online this year.
Younger women’s specialty apparel retailer The Wet Seal Inc. is closing down its Arden B brand.
The decision from Wet Seal, No. 416 in Internet Retailer’s 2014 Top 500 Guide includes shuttering its Arden B e-commerce site and closing 31 of 54 stores located primarily in shopping malls over the next two years. Other stores will be transitioned over to Wet Seal and will sell Wet Seal-branded merchandise, says CEO John Goodman.
The company expects to complete its transition from some Arden B stores to Wet Seal stores by the end of July, close 15 Arden B stores in 2014 and the remaining 15 locations in 2015. Wet Seal didn’t say when it would close down ArdenB.com. To end all Arden B operations, Wet Seal will take a charge of $1.3 million in the second quarter, a non-cash impairment charge of $3 million for writing down certain Arden B store assets back-dated to the first quarter and $500,000 in additional write-offs through the end of 2015. The Wet Seal is scheduled to release its first quarter earnings on May 27.
“With this process underway, our management team and board of directors will be focusing greater attention on our sweeping strategic initiatives, and this change positions us to take advantage of opportunities for growth within the Wet Seal brand,” Goodman says. “We are making progress against our strategic plan to enhance Wet Seal’s product, merchandising, customer engagement and overall store performance, as well as drive growth in our e-commerce business. Importantly, our transition strategy for Arden B accelerates our opportunity to expand in the growing junior plus market.”
Wet Seal launched Arden B in 1998 as a retail brand that sold contempary but affordable apparel to fashion-conscious women ages 24 to 34. But the brand was losing sales and operating at a loss. Arden B also didn’t fit within a new business strategy that emphaszies growing its Wet Seal business, which sells to young women ages 13 to 23, the retailer says.
For the fiscal year ended Feb 1, Wet Seal reported:
- Total sales declined year over year 8.7% to $530.1 million from $580.4 million. Arden B sales declined 29.2% to $60.4 million from $85.3 million in 2012.
- E-commerce sales declined 8.6% to an Internet Retailer-estimated $31.8 million from $34.8 million in 2012. Wet Seal doesn’t break out Arden B e-commerce sales.
- Comparable-store sales declined 4.1%. Arden B comparable-store sales decreased 7.6%.
- Net loss was $38.4 million compared with a net loss of $113.2 million in 2012. Arden B posted an operating loss of $4.4 million compared with $7.6 million in 2012.
As part of its broader turnaround Wet Seal also has plans to grow e-commerce from about 6% of sales to about 10% as soon as this year, the company says.