The fashion apparel retailer
Wet Seal Inc.
) search for a Chief Executive Officer ended with the appointment
of John D. Goodman. The company signed an employment contract
with Mr. Goodman, under which he will serve as its CEO through
January 30, 2016.
Mr. Goodman has 25 years of experience with companies
), Levi Strauss & Co., Mervyn's and Bloomingdale's. The
veteran in fashion retailing had recently served as the Executive
Vice President, Chief Apparel and Home Officer of
Sears Holding Corporation
The newly appointed CEO is expected to drive Wet Seal to newer
heights. He has the understanding of fashion retailing for young
people, which should help sales at Wet Seal. Moreover, Mr.
Goodman is experienced with turnaround initiatives and had proved
effective for Charlotte Russe, a publicly traded junior
Mr. Goodman replaces Susan McGalla, who had been ousted by Wet
Seal management amid declining sales and the company's being
charged for racial discrimination against its African American
employees. The company had fired McGalla even before finding a
However, shareholders are not confident about the company's
steps, which we think is because of its having replaced four CEOs
in five years without any improvement in its top line.
Meanwhile, the teen fashion chain suffered declining sales, as
same store sales plunged 9.7% year over year in the five-week
period ended December 29, 2012. This compares unfavorably with
the 3.7% decline in same-store sales in the year-ago period.
Total sales in Wet Seal stores slipped 7.2% year over year to
$62.9 million and Arden B stores' total sales declined 14.7% to
$10.1 million in December 2012.
The decline in total sales and comparable sales could be
attributable to the slower pace of economic recovery and lower
spending by domestic customers. The fear of a fiscal cliff and
volatile teen fashion also contributed to the lower sales of the
Wet Seal faces stiff competition from
American Eagle Outfitters Inc.
) and Gap Inc.. Currently, Wet Seal holds a Zacks #3 Rank
(short-term Hold rating).
AMER EAGLE OUTF (AEO): Free Stock Analysis
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WET SEAL INC -A (WTSLA): Free Stock Analysis
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