The Wet Seal era is all but over.
The fashion retailer for teenagers announced Wednesday that it is immediately closing 338 stores — about two-thirds of its locations — and laying off about 3,700 employees.
Financial analysts have known for months that the troubled company was headed down this path. Facing stiff competition from budget fashion juggernauts H&M and Forever 21, Wet Seal has suffered financial losses and management upheaval for years. In just a year, the company’s stock tumbled from $2.83 a share to mere pennies per share, closing at 6 cents on Tuesday.
“This was a very difficult decision to make, but after reviewing many other options since I returned to the company in September, our financial condition leaves us no other alternative than to close these stores,” Wet Seal chief executive Ed Thomas said in a statement.
But Wet Seal employees were the ones to break the news to the masses that store closures and layoffs were imminent this week.
Rogue employees at several locations posted large signs in the store windows adjacent to signs announcing up to 70 percent off everything sold there.
— Creutzfeldt (@malafama_de) January 5, 2015
“Our Mission Statement: We lie to our employees to hide the fact that yes, we’re closing and gave no notice,” one sign said.
Among their grievances: Employees said they were told that they would receive no severance pay and no compensation for accrued vacation time, and they were not permitted to look for other jobs.
The signs started to appear in stores in Virginia, Ohio and Washington — posted by aggrieved employees with, apparently, nothing to lose. Photos of those messages quickly made their way to Reddit and Facebook by last weekend.
Wet Seal employees said they knew that the company may have been within its right to do all of the things described in their notes to the public.
“People are laid off every day. I’m not special. I understand that. I get that, legally, they can do this. It doesn’t make it right,” Andrea Friesner, a store manager in the Puget Sound area, told the Seattle Times.
There is no way to make everyone happy in the event of a bankruptcy or mass layoffs. But the fallout from Wet Seal’s apparent handling of its impending closures and layoffs — by potentially alienating current and former customers and employees — seems ill-advised for a company desperate to hold on to whatever chances of survival it has left.
The company said it plans to keep about 173 stores open and maintain its online presence. But at this point, it seems that all that is left of Wet Seal is nostalgia for a bygone era.
And even that may not survive this financial and, now, public relations debacle.
According to Friesner, when the photo of her store’s sign began making the rounds online earlier this week, the store’s district director fired her and two other employees — two days before the company announced that she would have been laid off.