Global advisory firm Gordon Brothers won a bankruptcy court auction for the Wet Seal brand on Thursday.
GB’s $3 million bid bested the $1.5 million stalking horse offer from Canadian retailer YM Inc. The transaction is still subject to court approval.
Once the acquisition is completed, Wet Seal will operate under Gordon Brothers’ brands group. The deal includes other brands within the Wet Seal portfolio, such as Arden B, Blink and Chic Boutique.
Wet Seal filed its voluntary Chapter 11 petition for bankruptcy court protection on Feb. 1 in Delaware.
That filing came two years after its previous bankruptcy filing, which led to the retailer’s acquisition by Versa Capital.
The latest trip to bankruptcy — a so-called Chapter 22 filing — will help the company wind down its operations. The retailer had already determined in January that would shutter all stores after being unable to find a buyer. As recently as 2014, the company had 478 retail sites and annual volume of over $500 million.
Ramez Toubassy, who heads up GB’s brands division, said, “Our plan for Wet Seal is to rebuild and reposition the brand and develop a unique new business model to best position it for future success.”
Toubassy joined the company in May 2016 after the company he cofounded, Blast-Off Brands, was acquired by GB.
The Wet Seal filing followed recent bankruptcy petitions from The Limited and American Apparel.
Private equity firm Sycamore Partners acquired The Limited’s intellectual property assets for $25.8 million, and could bring back the brand as an online business, a move similar to what it did when it acquired the IP assets of bankrupt Coldwater Creek. In the case of American Apparel, Canada’s Gildan Activewear has closed on its $88 million acquisition of the firm’s IP assets. Gildan spent an additional $15 million to acquire the brand’s inventory, bringing the total deal to $103 million.