Foothill Ranch-based The Wet Seal Inc., corporate parent of the young women’s specialty apparel retailer of the same name, is implementing a number of corporate-level initiatives to focus on cost saving and investment.
The company is eliminating a total of 35 positions, including 32 at the corporate level and three in the field. According to the company, “a portion” of these positions is currently vacant.
The company also plans cost reductions of $2.5 million through what it described as “staffing efficiency measures” and $2.1 million through other cost savings plans. In addition, the company’s president and chief operating officer, Ken Seipel, has announced his resignation “to pursue other professional opportunities,” effective immediately. The position of chief operating officer is added to the other job cutbacks, the company said. In all, the executive and non-executive reductions will save a total of approximately $3.8 million annually.
In light of the removal of the COO position, Wet Seal CEO John Goodman, who joined the company just last month, has assumed direct leadership of store operations, e-commerce and construction, while the company’s chief financial officer, Steve Benrubi, has taken control of information technology and real estate concerns.
Goodman thanked Seipel for his work over the past two years, especially for his leadership during the second half of 2012, when the company was without a chief executive. “During that time, Ken partnered with Steve Benrubi to successfully begin restoring our fast fashion model in the midst of board leadership change and a vacancy in the chief executive officer position. We appreciate Ken's stewardship during that challenging period for the company, and we wish him well in his future professional endeavors.”
The company’s board has also initiated a $25 million share buyback program. This represents approximately 10 percent of the total market capitalization, based on Wet Seal’s share price at close of market on Jan. 31, 2013.
Goodman said that the new steps would create a “leaner and more nimble and entrepreneurial organization.”
“Our team is now better structured to take quick and decisive actions to improve merchandising and increase efficiencies throughout all functional areas. To that end, we continue to work diligently towards restoring profitability and positioning the company to make additional investments to drive future growth.”
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