Wet Seal fires CEO as sales sink

Foothill Ranch, Calif. -- Wet Seal said Monday it has fired CEO Susan McGalla, effectively immediately, citing “financial performance of the chain” as the sole reason for her termination.

No successor is in place, and the company said that CFO Steven Benrubi, along with chairman Hal Kahn and COO Ken Seipel, will serve in that capacity during the search process.

McGalla was named CEO in January 2011, and has an employment contract with the company through August 2014. Prior to joining Wet Seal, she was president and chief merchandising officer for American Eagle Outfitters.

Wet Seal has struggled mightily over the last year and, in May, announced it would close its Arden B chain as well as slow Wet Seal’s growth in order to tighten cost controls. Sales have continued to drop over the summer months and on Monday Wet Seal cut its outlook for the quarter ending July.

In addition to battling declining sales, the retailer is also faced with a lawsuit filed earlier in July, alleging that Wet Seal discriminated against African-American store management employees.

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