Clothing Retailer Wet Seal May Fail To Protect

Beijing time on the morning of January 8th,

Wet Seal announced on Wednesday that it will close 338 stores and remove about 3700 full-time and part-time employees.

Wet Seal has warned early last month that it would submit bankruptcy protection applications if it could not meet immediate liquidity needs.

The company's share price rose 7.2 cents on Wednesday to 12.7 cents per share, or 130.73%.

The company's share price fell by about 98% in 2014.

As the target customers' preferences turn to H&M, Forever 21 and Zara have the ability to popularize the latest fashions on the display platform to the store's fast fashion brands within a few weeks. Many young clothing brands including Wet Seal have been in trouble recently.

Amazon and other online retailers have also taken many customers through big discounts.

Previously, there had been a slowdown in sales growth over the past five quarters.

Unable to negotiate with the shop owners for proper concessions, the company had to choose to close a large number of stores.

A year ago, data showed that Wet Seal had 7413 full-time and part-time employees.

As of the nine months ending November 1st, Wet Seal had a net sales of US $317 million, and the proposed closures had more than half of them.

Wet Seal, which is seeking strategic and financial options, will only maintain it after that.

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Wet Seal says closing these stores will have $5 million 400 thousand to $6 million 400 thousand before tax expenses.