NEW YORK — Troubled Wet Seal is turning to an industry veteran to be its latest lifesaver: Joel N. Waller.
Waller, chairman of Wilsons Leather, was named chief executive officer of The Wet Seal Inc., effective Feb. 1, 2005.
With 27 years of retail experience under his belt, Waller will be taking the helm of Wet Seal from Peter Whitford, who resigned Nov. 9. Allan Haims, formerly president of Wet Seal’s stores division, quickly followed suit and resigned Nov. 23. Interim ceo Joseph Deckop will return to his role as executive vice president when Waller joins the company.
Churning leadership is not new for the Foothill Ranch, Calif.-based retailer. Whitford, a Disney Stores executive, originally replaced longtime Wet Seal ceo Kathy Bronstein to try to turn the company around in 2003. As evidenced by the most recent numbers, Whitford may have staved off bankruptcy, but the retailer’s sales performance was poor.
Wet Seal posted a 15.9 percent sales decline in the third quarter compared with the same period last year, while same-store sales declined 12.6 percent and year-over-year transactions fell 20.1 percent.
Waller may have better luck at Wet Seal, which has fresh capital and a new retail consultant. New York-based S.A.C. Capital Associates LLC, which already owns a 4.5 percent stake in Wet Seal, provided an immediate cash infusion of $10 million in interim financing on Nov. 9 to the ailing company. It issued an additional $46 million in secured convertible notes, with an initial conversion price per share of $1.50.
Before announcing Waller’s appointment, the company also hired retail consultant Michael Gold, who has run more than 400 clothing stores in the U.S. and Canada. But Gold is not the first consultant to join in recent years. In 2003, Whitford brought on designer Victor Alforo, and earlier this year he hired teen marketing expert Anne Kallin Zehren, who launched the Wet Seal “stylizer” concept.
The company’s turnaround, however, will likely require more than teenage trend-spotters and a fast capital infusion. According to analysts, the teen retail segment continues to become more competitive, and retailers that do not carve a very specific niche in the market are bound to flounder.
This story first appeared in the December 20, 2004 issue of WWD. Subscribe Today.
Shares of Wet Seal closed down 3.78 percent on Friday to $1.78. Its 52-week high is $10.60 and the low is $0.69.