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Wet Seal Bid Falls Short

FOOTHILL RANCH, CA-Teen-girl retailer Wet Seal announces that its $15.2-million bid for G+G Retail Inc. is denied.

By Dana Dubriwny | Updated on February 15, 2006

FOOTHILL RANCH, CA-Teen-girl retailer Wet Seal announced early this morning that its $15.2-million bid was not enough to purchase the assets of G+G Retail Inc. Primarily found in shopping malls, G+G operates more than 550 stores found in some 41 states in the US as well as in the Caribbean. Citing disappointing holiday sales in 2005, the company filed for Chapter 11 bankruptcy protection on Jan. 25. At the time, the company said it had struck a purchase agreement to be acquired by Wet Seal.

However, following the $15.2-million bid made by Wet Seal, BCBG Max Azria Group Inc. countered offered, and requested that a US bankruptcy court deny Wet Seal’s bid. In turn, BCBG pledged to pay $15.2 million in cash for G+G as well as $22 million to the company’s unsecured creditors over five years. According to court documents, BCBG offered to also provide more than $20 million of fresh inventory, and rehire more than half of the retailer’s terminated employees.While there have been no further details released regarding the auction, locally based Wet Seal has been in a turnaround of its own. During its latest reported financial quarter, which ended Oct. 29, the company posted a $6.5-million loss, down from $24.2 million during the same year-ago period. This year executives had 20 to 25 new stores planned on top of its portfolio of 402 namesake units and its 93-store Arden B. chain, a more expensive concept that targets an older customer.

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