This is not the type of continuous news we like to report on this Tuesday. After the announcement of U.S. Steel going idle, Wet Seal, the teen-aimed retailer is also looking to shut their doors, but this move will be permanent. 338 stores will be closing around the nation resulting in a drastic elimination of 3,695 employees. The economic moves are devastating lower middle class workers who desperately need their jobs to stay afloat financially. Wet Seal has been struggling under the growing competitive pressures of H&M and similar retailers.
Just on Monday, BuzzFeed obtained a script to be shared from Wet Seal to their employees. Reportedly, the employees kept asking management if the rumors were true on closures, but nothing was confirmed.
In addition to obtaining the notice, a Redditor snapped a photo outside a Wet Seal mall location where employees penned a banner. It depicted to #ForgetWetSeal since employees were literally given one day to find a new job. The banner noted while they are receiving letters indicating a “financial hardship” is closing its doors, their CFO just received a $95,000 raise.
Wet Seal stated they had run into negotiation issues with their landlords, mounting the financial stresses. The company will still have a presence in 173 locations and via their online website. The company’s CEO, Ed Thomas, released a statement calling the closures “a very difficult decision to make,” but said the “financial condition leaves us no other alternative than to close these stores.”
The company will face millions of dollars in additional expenses for the closures, terminations, and taxes.
Over the years, mall based retailer stores have faced continued challenges to meet financials based on the reduction of foot traffic in their stores. Investors are also pulling away from these ill-fated investments, opting to move their money elsewhere.
Wet Seal’s shares are worth a very meager $1 per share on Tuesday. They are not alone. American Eagle, Urban Outfitters and even Abercrombie & Fitch sit on the low end of share worth.
The outlet did not respond to requests regarding their thoughts on employees releasing their frustration on window-length banners in stores. For now, employees are left to face the winter without a financial cushion and with only a one day notice of termination.