Wet Seal Inc. reported a fourth-quarter profit Thursday and said it will roll out a new line of tops designed by Ashlee Simpson on April 22 to coincide with the launch of the pop star’s third CD, “Bittersweet World.”
This story first appeared in the March 28, 2008 issue of WWD. Subscribe Today.
The CD will be sold in Wet Seal stores.
The teen specialty chain said it swung to a profit in the quarter after a year-ago loss, but forecast first-quarter earnings below analysts’ estimates.
Wet Seal said, based on current market conditions, first-quarter earnings should be in the range of 4 cents to 6 cents a diluted share. Wall Street analysts were expecting 8 cents.
The Simpson collection will feature designs that reflect her sense of style and personality. The tops will be priced in line with Wet Seal merchandise.
“Ashlee is a role model for our girl and her fun and flirty sense of style is an inspiration for the line,” said chief executive officer Ed Thomas. “The goal was to deliver affordable fashion, and Ashlee is an ideal partner for this.”
For the three months ended Feb. 2, earnings reached $12.2 million, or 13 cents a diluted share, compared with a loss of $5.7 million, or 7 cents, in the year-ago period partly caused by a large interest expense. Sales grew 7.9 percent to $179.6 million from $166.4 million, and total same-store sales dropped 1.4 percent. By division, same-store sales at Wet Seal rose 2.1 percent and sank 12.5 percent
at Arden B.
For the full year, the company posted a profit of $23.2 million, or 23 cents a diluted share, versus a loss of $12.8 million, or 18 cents, last year. Sales rose 8.3 percent to $611.2 million from $564.3 million.
Management said Arden B is still in the early stages of a turnaround and expects to have an improved inventory mix in stores by the end of April.