The typical annual net store count increase of 15% will be trimmed to 5% next year, with the bulk of openings to take place in the second half of the year.
"We have been reviewing our real estate deals in the pipeline, and we have eliminated some deals because of such things as inappropriate sizes, inadequate economics and other factors," said Edmond Thomas, CEO. About 20 stores will close as a result of lease expirations.
Thomas, who served as Wet Seal president and CEO from 1992 to 2000 and rejoined the company in September, is personally involved in the real estate decisions, and is favoring B and C malls, which offer better economics. The company also now is considering off-mall locations, he added.
"We plan to test a couple of stores as soon as we can," Thomas said. "There are significant differences in economics. Our customer is definitely shopping off mall. If the location is right, there is no material difference in sales productivity."
During the third quarter, the company opened 32 stores, and closed none. It has opened 60 net new stores year to date. Plans call for seven net new store openings in the fourth quarter, consisting of five net new units at Wet Seal and a net increase of two stores at Arden B.
Net sales for the quarter were $150.3 million, compared to net sales of $143.3 million the same quarter last year. Comparable-store sales decreased 3.4%. The company posted a net loss of $3.3 million, compared with prior-year third quarter net income of $2.4 million.
As of November 3, Wet Seal operated 490 stores in 47 states, the District of Columbia and Puerto Rico, including 396 Wet Seal stores and 94 Arden B stores.
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