Wet Seal’s chief executive officer, John Goodman, is taking on more responsibilities as a result of a workforce reduction and cost-savings initiatives at the teen retailer.
Goodman, who took over the ceo post a few weeks ago, will assume direct leadership over store operations, e-commerce and construction functions. Steve Benrubi, chief financial officer, will add information technology and real estate responsibilities to his existing duties.
Goodman said, “The company is in the process of reviewing various business strategies and practices, with the goal of increasing operational efficiency and profitability and aligning our workforce to our current business needs. We are in the early stages of implementation. We very much appreciate the past contributions of the affected team members.”
Goodman said the leaner organization is better structured to enable quick decisions on merchandise improvement and efficiencies throughout “all functional areas.”
The changes are part of a workforce reduction following an organizational review. As part of the changes, Ken Seipel, president and chief operating officer, has resigned. The Wet Seal has eliminated the position of chief operating officer. The company said a total of 35 positions have been eliminated, many of which are currently vacant. Of the 35 positions, 32 are at the corporate level and three were field posts.
The company said the workforce reductions are expected to result in annualized pretax savings of $3.8 million beginning in fiscal 2013. It will incur a $1.3 million fourth-quarter charge for onetime severance costs.
Other cost-savings initiatives include $2.5 million for store labor through “staffing efficiency measures” and $2.1 million for other related plans. In the fourth quarter of fiscal 2012, the retailer completed two early lease terminations for two Arden B. stores.
Total net savings from all measures are expected to general pretax savings of $5.5 million for fiscal 2013.
Separately, the company also implemented a $25 million share repurchase program, which represents 10 percent of the retailer’s total market capitalization based on the closing share price on Jan. 31.
Foothill, Calif.-based Wet Seal operates more than 550 stores in 47 states, including the District of Columbia and Puerto Rico, under the Wet Seal and Arden B. nameplates.