WET SEAL AGREES TO BUY 83 BRITCHES MALL STORES
NEW YORK — Wet Seal said Tuesday it has signed a letter of intent to purchase 83 Britches Great Outdoor Stores in regional malls throughout the U.S.
This confirms a report in these pages on June 5, page 2.
The majority of the Britches stores will be converted into Arden B. stores, with the remainder to be Wet Seal, Contempo Casuals and Limbo Lounge units.
Arden B., Wet Seal’s new retail concept, is described as a bridge between the junior and young contemporary customer.
The company said it had planned to open seven Arden B. stores in the fourth quarter. With the acquisition, the new chain will have more than 50 Arden B. stores by the end of the year.
“We have a merchandising staff in place and have been successfully testing Arden B. within our larger Wet Seal and Contempo Casual stores since last year,” said Kathy Bronstein, chief executive officer of Wet Seal.
Retail analysts stated that the success of Bebe, the San Francisco-based chain of juniors stores, has inspired other juniors retailers such as Wet Seal to explore the contemporary niche.
The teenage market is also hot. According to James Palczynski, a retail analyst at Ladenburg Thalmann, teensagers spent some $80 billion last year, and chains such as Abercrombie & Fitch and American Eagle Outfitters have been capitalizing on this.
However, in the first quarter ended May 3, The Wet Seal Inc. posted a slight earnings decline with high expenses but only modest sales growth.
The junior retailer earned $3.49 million, or 26 cents a basic share, against $3.52 million, or 26 cents, a year earlier.
Sales rose 9.7 percent to $104.8 million from $95.6 million.
Same-store sales fell 3.2 percent.
Gross margin improved to 28.6 percent of sales against 26.6 percent. However, selling, general and administrative expenses rose to 24.2 percent of sales from 21.1 percent. Excluding the Britches acquisition, Wet Seal is on plan to open 75 new stores in fiscal 1998.
The company operates 411 stores in 42 states and Puerto Rico.