Wet Seal Inc. (WTSLA), the women’s apparel chain, fired Chief Executive Officer Susan McGalla amid declining sales.
McGalla’s departure is effective immediately, the Foothill Ranch, California-based company said in a statement. While the board searches for a replacement, Chief Operating Officer Ken Seipel and Chief Financial Officer Steve Benrubi will serve as co-principal executive officers. McGalla joined Wet Seal in January 2011 after 14 years at American Eagle Outfitters Inc. (AEO)
Comparable-store sales in the current quarter are expected to decline as much as 11 percent, the company said. So-called same-store sales are a key benchmark for retailers’ growth because closed and new stores are excluded. The second-quarter loss will be as much as 7 cents a share before one-time costs such as CEO severance costs, trailing a previous forecast of 3 cents to 6 cents.
Wet Seal declined 10 percent to $2.66 at the close in New York for the biggest drop since Nov. 3. Shares have declined 18 percent this year.
“While respectful of the fact that the Board apparently has a different vision for the direction of the company, I am proud of what we have accomplished,” McGalla said in an e- mailed statement from spokeswoman Lisa Cohen. “Over the past eleven months we have been executing on the turn-around plan that we collectively developed.”
The retailer, which operates more than 550 stores in the U.S. and Puerto Rico, increased sales 2.1 percent to $612 million in the 12 months through April 28. Profit declined 61 percent to $6.8 million in the same period.