Wet Seal is the latest retailer to throw in the towel.
The teen-focused store will close all 171 of its stores. Just days after rumors swirled about a possible second bankruptcy, the Irvine, California-based chain informed employees that it had run out of options for financing the business and a search for a buyer was unsuccessful.
In a letter obtained by The Wall Street Journal, vice president and general counsel Michelle Stocker said: “Unfortunately, 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.”
Wet Seal had been in critical condition for more than two years. The company closed 338 stores and laid off 3,695 employees before filing for bankruptcy in January 2015. A reprieve came when private equity firm Versa Capital Management, LLC acquired the company and invested $10 million in chain operations.
The retailer is the latest in a growing list to fall victim to consumers’ changing buying habits. A shift to ecommerce and a preference for experiences over transactions are turning malls into ghost towns and leaving traditional brick-and-mortar based business at a loss. Though many are experiencing double-digit increases online, the ecommerce sales are often not large enough to sustain the businesses or justify the rent associated with physical stores.
The Orange County Register reports that clearance sales have already begun.