Smaller 2Q Loss at Wet Seal
Foothill Ranch, Calif., Wet Seal Inc. reported a loss of $35 million, or 87? per share, for the second quarter compared with $106.3 million, or $3.31 per share, last year. The results include a $16.1 million charge for a consulting agreement with Michael Gold, whom the struggling specialty retailer has hired to turn around its sales picture. Second-quarter sales increased 19.5% to $126.3 million from $105.7 million last year.
Wet Seal’s results for the quarter also include $23.3 million in deemed, noncash preferred stock dividends related to its $24.6 million equity-financing deal in May.
“Our accelerated sales growth and operating margins improvement have led to a significant improvement in operating results,” said Joel Waller, CEO, Wet Seal.
Wet Seal, which has been in the red since fiscal 2003, warned as recently as June that it could be forced to seek Chapter 11 bankruptcy protection if its operating losses and negative cash flow continued. In May, the company closed an equity financing deal to raise additional funds. The financing, along with growth in same-store sales and better operating margins, has significantly improved the chain’s liquidity, according to Waller.
Jones Apparel Group Names Executive
New York City, Jones Apparel Group, which operates the Barneys New York chain as well as designs, markets and wholesales branded apparel, footwear and accessories, today announced that Clare Cuthbert has been appointed president of the company’s accessories division.
Cuthbert formerly held senior positions with Bloomingdale’s, Bergdorf Goodman, Bendels, Donna Karan and Esprit.
Big 5 Gets Nasdaq Extension
El Segundo, Calif., Big 5 Sporting Goods Corp. said Nasdaq has given it another extension, this one until Aug. 31, to file financial statements for past periods. The retailer risks being delisted if it fails to meet the latest deadline. Earlier this week, Big 5 hired a new CFO, Barry D. Emerson, who will start in early September. His hiring comes after the company said earlier this month it was seeking a new CFO with a strong accounting background, given its financial reporting problems. The company is in the midst of correcting accounting errors related to accounts payable and leases, among other items.