Teen retailers have taken the brunt of the fallout as consumers opt to abandon malls.
The list of bankruptcies reads like a who’s who of our collective adolescent years: Pacific Sun, Aéropostale and Wet Seal, the latter of which could be facing bankruptcy No. 2.
Sources close to the matter say Wet Seal’s private equity owner Versa Capital Management, LLC, is exploring its options, according to The Wall Street Journal.
The Irvine, California-based retailer filed for chapter 11 bankruptcy protection in January 2015 and closed 388 stores. The company was subsequently acquired in an auction by Versa Capital, which invested $10 million.
The options in play today are a going-concern sale for the entire business or for the online portion only.
The firm could also liquidate all 171 locations and operate as an e-commerce pureplay, a move that mirrors Sun Capital Partners’ potential plan for The Limited.
Finally, the company could opt to restructure, potentially in bankruptcy court.
Wet Seal was founded in 1962 in Newport Beach, California. According to its site, the company currently employs more than 3,000 people.