Wet Seal sells for $3 million in a bankruptcy auction
March 3, 2017 12:46 PM
Teen apparel chain The Wet Seal LLC will live on, eventually.
Investment firm Gordon Brothers said Friday that it won Wet Seal’s intellectual property and brand assets at a bankruptcy auction for $3 million. The acquisition, which is pending court approval, comes a month after Wet Seal filed for bankruptcy for the second time.
Wet Seal’s online sales have been suspended, with visitors to its site greeted with the message, “While we take a small (but necessary) break, we want you to know that all orders received by Monday, February 27, 2017 will be shipped. All other orders will be canceled and not charged.”
In announcing the acquisition, Gordon Brothers president of brands Ramez Toubassy indicated that Wet Seal will live on in some form, though he declined to specify when. “Our plan for Wet Seal is to rebuild and reposition the brand and develop a unique new business model to best position it for future success,” Toubassy said.
When reached by phone, a Gordon Brothers spokeswoman indicated that e-commerce is very likely part of the investment firm’s future plans for Wet Seal.
Wet Seal, No. 510 in the Internet Retailer 2016 Top 1000, generated an Internet Retailer-estimated $27.5 million in online sales in 2015, down 2.0% from $28.1 million the previous year.
Wet Seal becomes the latest financially troubled apparel retailer to be acquired:
- Last week, private equity firm Sycamore Partners acquired the intellectual property of apparel retailer Limited Stores LLC (No. 216 in the Internet Retailer 2016 Top 500 Guide) for $26.75 million.
- In mid-February, U.K. fashion e-retailer Boohoo.com UK Ltd. (No. 166 in the Internet Retailer 2016 Europe 500) bought women’s clothing retailer Nasty Gal Inc. (No. 98 in the Top 500) for $20 million.
- In September, mall operators Simon Property Group and General Growth Properties Inc. along with licensing firm Authentic Brands Group formed a consortium to acquire Aeropostale Inc. (No. 154 in the 2016 Top 500) for $243 million.
For more on why companies are buying financially troubled retailers and what is being done to breathe new life into those retailers, check out “Brand Revival” in the March issue of Internet Retailer magazine.