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Add this one to the graveyard of mall brands: Wet Seal is closing all its stores. The ailing teen retailer notified its employees via a letter sent out last Friday.
In the letter, obtained by the Wall Street Journal and published this week, vice president and general counsel Michelle Stocker told employees that the decision came about because “the company was unable to obtain the necessary capital or identify a strategic partner, and was recently informed that it will receive no further financing for its operations.”
Which isn’t all that surprising, considering how much Wet Seal has been struggling over the last few years. In 2015, it closed 338 stores — some 60 percent of its entire store fleet. Around the same time, the California-based company also filed for bankruptcy, although Versa Capital Management LLC bought the brand out of Chapter 11, according to the Journal, for $7.5 million. Versa promised to keep many of its stores open — but it looks like that plan didn’t work out too well.
It’s also not surprising, considering how many “teen brands” and “mall brands” (often the same thing) are struggling these days. For many retailers, it’s a matter of having lost their identities over the years. One quick glance at Wet Seal’s Instagram, and it’s unclear what aesthetic it’s trying to project to its (impressive) 300,000 followers — is it along the lines of Nasty Gal, Reformation, or Brandy Melville?
During its heyday, Wet Seal was one of the coolest brands for teens; it was the store tween girls would hit up after a stop at Delia’s. As this extensive timeline on Buzzfeed may remind you, Wet Seal was the cool brand you wore while listening to 98 Degrees; the store worked with Mandy Moore back when she was all bubble gum and 15; Ashanti graced the cover of its 2002 catalogue; and it constantly gave away tickets to see pop bands like No Doubt and BBMAK (remember them?!).
But fast-forward to 2004 and the brand was all over the place trying to target multiple demographics at once, from a “very young” 14-year-old to 19-year-olds (who were already supposed to be shopping at its more “adult” counterpart, Arden B.). Over the next decade, sales plummeted.
In 2014, by the time Wet Seal tried rehiring an old CEO and attracting shoppers aged 18-24 instead of teens, it was already too late. More powerful, trendier fast fashion chains like Zara and H&M were already staking their claim.
To compete with the fast-fashion behemoths — especially those who’ve never been totally beholden to malls — a retailer today needs to know its customer and deliver precisely what is expected. (Unless you are Forever 21, a brand that is trying to be everything for everyone will probably not succeed.) Names like Vineyard Vines, Lilly Pulitzer, and Supreme have all succeeded in this trend-driven era by staying steadfast in their image with the customer who knows and loves them.
It’s ironic that Wet Seal — and BCBG, The Limited, Express, and countless other “trendy” retailers gasping their last breaths — haven’t kept up in the trendy, affordable fashion game, considering that’s how they began.
Malls are a piece of the problem. The mall is often a place we think about nostalgically and associate with childhood or our teen years. For many Americans, it’s also — or at least, it was — an epicenter for jobs. But as Racked’s Cam Wolf noted just this morning, for retailers, being based in a mall is a liability more than anything else. According to the New York Times, 15 percent of malls have vacancy rates between 10 and 40 percent.
You could see the bad news coming for Wet Seal, which laid off a whopping 3,695 employees in 2015, many of whom were only given one day’s notice and weren’t transferred. Workers in Seattle — who were particularly livid that they couldn’t collect a paycheck for unused vacation and sick time when Wet Seal’s CFO got a giant raise — tried to stage a boycott by placing handwritten signs in stores and spreading the word via Reddit and Twitter. That didn’t look good for a company that already had to settle a $7.5 million discrimination lawsuit after Wet Seal executives were caught trying to fire black employees in order to “maintain its brand image.”
But ultimately, what brought Wet Seal down was likely a descent into irrelevance and lack of brand identity as its customers aged up into fast fashion and out of the mall.
Racked reached out to Wet Seal and will update this article as we hear more.