COSTA MESA, Calif. — The Wet Seal Inc. tapped Peter Whitford chief executive officer at its annual shareholders meeting here Thursday, confirming a WWD report Wednesday about the appointment.
As reported, Whitford resigned last week as president-worldwide of Disney Stores, which is downsizing its 700 unit-chain and seeking to sell off sites. Whitford officially joins Wet Seal, based in Foothill Ranch, Calif., on June 30.
“Sometimes it’s best to be blunt,” said Wet Seal chairman Irving Teitelbaum, in opening up the meeting. “Our company hit a major bump in the road almost one year ago. I prefer to look at the future, a future of stability and building a solid new foundation for our businesses. At our core Wet Seal division, our mission, our vision, is to restore Wet Seal to its position as the retail destination for juniors in malls of America. All our divisions are led by seasoned and energized merchants who live and breath fashion, the lifeblood of our businesses.”
Whitford, 47, is a native of Sydney, Australia. He has more than 25 years of experience in domestic and international retail. He led the U.S. expansion of Australian unisex apparel retailer Country Road in the Eighties, and, prior to Disney, was president and ceo of Structure, the men’s wear division of Limited Brands Inc., which is being folded into Limited’s Express division.
After the meeting, Whitford described his managerial style as “very open,” and said he is a “merchant at heart.” He also conceded that he has a bizarre sense of humor.
However, Hal Reiter, chief executive officer of Herbert Mines Associates executive search, said, “Although Peter may not have the reputation of a Michael Weiss [Express ceo] or a Mickey Drexler [J. Crew ceo],he is well-versed in vertical specialty store retailing, he’s a capable manager and he’s got good taste. He could very well navigate Wet Seal back to better business in a sector that’s increasingly competitive and crowded.”
At the meeting, Whitford imparted a sense of leadership. “I really empower people to do their jobs and will make them responsible for what they have to do,” he said. “And I spend a lot of time with the customers. I’m in stores every day. I like to listen and find out what they have to say. Some of the key issues will be to focus on Wet Seal, and that will need to be rebuilt fairly quickly. The next thing we need to look at is to ensure that not only Wet Seal but Arden B. are positioned appropriately as they butt up against each other.” Wet Seal and Arden B., as well as Zutopia, are divisions of Wet Seal Inc.Whitford, succeeds Teitelbaum, who continues as chairman and has been acting ceo since February when Kathy Bronstein, vice chairman and ceo, was handed her pink slip.
Bronstein was credited with turning Wet Seal into one of the hottest chains in the Nineties but became a victim of a faltering business during the second half of 2002. Wet Seal operates 490 Wet Seal junior stores, 101 Arden B. contemporary stores and 31 Zutopia teen stores. The company has been suffering from a spate of monthly same-store sales declines because of merchandise missteps, a slowing economy, the California dockworkers’ lockout and national geopolitical issues. More specifically, while competitors such as Hot Topic, Pacific Sunwear and Abercrombie & Fitch posted gains, Wet Seal offered its 16- to 18-year-old target customer last year’s bohemian trends long after the look had begun to saturate the market. In addition, the retailer skewed far too old and too sophisticated for the high school-age customer.
Wet Seal posted a loss of $8.5 million in the first quarter ended May 3, reversing a year-earlier profit of $8.7 million while same-stores sales fell 25.5 percent. Net sales for the quarter were $123 million, down from $156.6 million a year earlier.
For fiscal 2002, the company’s net income plummeted 86 percent to $4.2 million on sales of $608 million compared with a net income of $31 million on sales of $602 million in 2001. Same-store sales fell 5.6 percent compared with a 4.7 percent increase in the prior year.
A return to the core focus will be evident as back-to-school merchandise hits stores in approximately six weeks with a relaunch of private label denim brand Blue Asphalt, according to Susan O’Toole, president of the Wet Seal division. “We’re very focused on casual and lifestyle,” she said. “We’re editing everything against the 16-year-old and it’s more than just denim. It’s active and great casual bottoms whether suede or corduroy.”
The company spent $39 million in capital improvements last year, mostly to open 69 stores and remodel 22 others. In 2003, capital improvements will be reduced to $17.5 million to fund 35 new stores and remodel 17 others. “We will continue to assess our cost structures as we go and may become more aggressive with new store openings once our sales return to higher levels,” said Walter Parks, chief administrative officer.Arden B., with a contemporary focus on 25- to 35-year-olds, “will continue to grow and grow profitably,” according to Teitelbaum. Arden B. could exceed 200 stores in the U.S. in the next few years, he added.
Zutopia, the relatively new tween division, is “still in its embryonic stages,” said Teitelbaum, but is “showing promise.”
“Looking ahead we remain cautiously optimistic about the second half of the year and are looking forward to the back-to-school season,” said Parks.
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