COSTA MESA, Calif. — “What makes Wet Seal Inc. rock?” Kathy Bronstein, vice chairman and chief executive of the junior specialty chain, asked shareholders Thursday at the company’s annual meeting at the Westin Hotel here.
In addition to the usual financial statistics and matters of corporate governance, Bronstein had Dropline, a four-piece rock band, standing by to help her answer the question musically.
The unorthodox approach helped Bronstein single out SealTV, an in-store network that’s been in 200 Wet Seal stores since March and will be in all 400 Wet Seal units by July. Dropline will be featured along with No Doubt in July as part of the internal network’s lineup of monthly features and interviews with music luminaries and celebrities.
“It lends a higher level of credibility than ever before to the brand,” said Bronstein of the decision to take SealTV chainwide. Interviews with Michelle Branch, the Goo Goo Dolls, Gene Simmons, Tom Green and Melissa Joan Hart will be aired as well.
With its brand now well established, Bronstein said “our focus now turns to growth.” She said she foresees the possibility of another 100 to 150 doors in the next few years if real estate opportunities permit.
“Our building blocks are in place to accomplish this goal,” said Irv Teitelbaum, chairman of the company. “We’re on a roll.”
Indeed, the company appears to be in good financial shape. Profits increased to $31 million on sales of $602 million in 2001 from $19.5 million on sales of $580 million in 2000. The company has no long-term debt.
In the first quarter, Wet Seal delivered a 62.7 percent increase in net income, to $8.7 million, along with a 13.6 percent sales increase, to $156.6 million, and an 8.2 percent rise in same-store sales.
After taking 27 store closures into account, the company, which now has a total of 571 units, expects a pickup of 50 to 60 units for the year.
Last year, Contempo Casuals was converted into Wet Seal and the chain reformulated its merchandising strategy and sizing to reach a broader range of customers. “Both of those goals have been accomplished,” said Bronstein, noting that between 50 and 60 new stores will be added under the banner this year.
Arden B.’s merchandise, under the direction of Greg Scott, was reformulated and is “the sweetheart of fashion editors…and the hip female customer,” said Bronstein. Arden B. will add between 15 and 18 stores to its current base of 84 stores.
Zutopia, the pre-teen concept acquired from Gymboree in March 2001, “has also seen the light,” said the ceo. “We made a choice to evolve that preteen business into a first-for-fashion brand.” Between eight and 10 stores will be added to 30 stores in 2002. “We are well positioned for rapid expansion in all three brands with a very strong balance sheet, an invigorated and innovative management team and the right formula for distinction of each brand,” said Bronstein. “We look forward with confidence to increased sales and profitability in an exciting future.””