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.
Wet Seal fires CEO
FOOTHILL RANCH, Calif. — Wet Seal has terminated the employment of its CEO, Susan McGalla, and has begun a search for a new executive to head the struggling young women’s apparel retailer.
Until such a person is found, Wet Seal president and COO and Steve Benrubi, CFO, will serve as co-principal execuitve officers and members of the office of the chairman, led by Hal Kahn, until a new CEO is elected by the board of directors.
For the month-to-date, Wet Seal’s comps have declined between 13% and 14%.
During its first quarter ended April 28, Wet Seal reported a same-store sales decline of 7.7% and a net loss of $0.3 million.
For the second fiscal quarter, the company expects comparable store sales to decline between 10% and 11%, which is at the low end of its initial guidance range.
Wet Seal currently estimates second quarter loss before non-cash asset impairment and CEO severance costs will be between 6 cents and 7 cents per diluted share, as compared with its initial guidance of a loss between 3 cents and 6 cents per diluted share.
Wet Seal operates 553 stores in 47 states and Puerto Rico, including 470 Wet Seal stores and 83 Arden B stores.
Oracle awards top retail exec
And the winner is… Oracle selects technology executive at Chile’s top department store chain for ultimate honor.
The average American has never heard of the Falabella chain of department stores, but the company dominates its home market of Chile and is regarded as a leader in the use of technology. So much so that when Oracle held its annual Retail Excellence Awards recently, it named Falabella’s VP technology and development, Julius Odian, as its Retailer Executive of the Year.
The award recognizes the retail executive who most effectively uses Oracle Retail Solutions to transform key business processes that enable the company’s overall growth strategy in the areas of planning, merchandising, store, e-commerce, supply chain, or other lines of business.
In addition to Odian, Oracle recognized 47 award nominees across five different categories, and recognized the winners in each category for their excellence in solving the most complex challenges in the retail industry.
Falabella opened its first department store in 1958 and today operates 40 upscale department stores throughout Chile and an additional 39 Falabella stores in Peru, Argentina and Colombia. The department stores are part of the S.A.C.I. Falabella conglomerate which also owns Mall Plaza shopping centers, Sodimac home improvement centers, Tottus supermarkets and Banco de Falabella.