Foothills Ranch, Calif. -- The Wet Seal Inc. on Friday announced that its COO is resigning as the struggling retailer initiates a corporate workforce reduction as part of a broader cost-saving initiative. In other moves, it will shutter two poor-performing Arden B stores.
The struggling chain, which also authorized a $25 million stock buyback program, said president and COO Ken Seipel resigned effective immediately. His position will not be filled. Instead, Seipel's duties will be shared between CEO John Goodman and CFO Steve Benrubi.
The Wet Seal said it cut 32 positions in its corporate offices and three in the field. The total workforce reductions, including the elimination of the COO position, are expected to result in annualized pre-tax savings of approximately $3.8 million beginning in fiscal 2013. The company expects to record a one-time charge of $1.3 million in its fourth quarter for severance charges.
The retailer also announced planned fiscal 2013 cost reductions of approximately $2.5 million for store labor through staffing efficiency measures and approximately $2.1 million for several other cost savings plans.
In addition to sagging sales, Wet Seal faces other challenges. It expects to pay $2 million in legal fees in 2013 over an employment-related lawsuit from prior years. It also announced plans, which it developed in collaboration with the U.S. Equal Employment Opportunity Commission, to improve its human resources training and development that will cost it approximate $1.9 million annually.