Wet Seal, a 173-store retailer of jewelry and other accessories for young women, filed for Chapter 11 bankruptcy protection Jan. 15 but plans to stay open—though disgruntled laid-off employees are waging a social media campaign to boycott the chain.
The Foothill Ranch, Calif., company, which last week shut 338 stores—about two-thirds of its total—will reorganize itself around its remaining better-performing stores and its e-commerce site, it said in a declaration filed Jan. 16 in Delaware federal court.
It noted that the shift to online shopping has crippled the teen retail sector, as demonstrated by the recent liquidations of competitors Deb Stores, dELiA*s, and Body Central Corp. Those problems were compounded by the company’s move away from fast fashion and unprofitable side ventures, it added. (One of those ventures, Arden B, was closed in May.)
The company has secured $20 million debtor in possession financing from fiancier B. Riley & Co. that will allow it to stay open and pay creditors, it said.
One possible stumbling block to any resurrection is the social media campaign being waged by former employees, who gripe that the company gave them little notice of closures. Their signs in store windows detailing their complaints have gone viral on Twitter and Reddit, under #boycottwetseal and #clubwetseal.
According to one, while the company claims “financial hardship, the CEO gave himself a $95,000 raise…Thanks to our loyal and hopefully former customers.”
How Wet Seal blew it – in pretty much every way a company can blow it. http://t.co/dfd3IQRwGs #boycottwetseal pic.twitter.com/Ac2x2Y3l8v
— TouchVision (@TouchVisionTV) January 8, 2015
Company bankruptcy papers can be seen here.
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