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The Wet Seal introduces fiscal 2011 store growth plans
20 Aug '10
5 min read
Mr. Thomas concluded, "Our Wet Seal and Arden B e-commerce businesses continue to perform well, having delivered a 6.5% increase in sales combined in the second quarter. In addition to driving incremental sales, the websites enhance our ability to connect to our customer, help to drive traffic to our stores and enable us to reach international markets. Starting immediately, we intend to moderately increase investment in our e-commerce inventories, marketing and team infrastructure to drive more aggressive sales growth through this channel at both Wet Seal and Arden B. We are very excited about our e-commerce growth opportunities and believe we can accelerate the expansion through these relatively minor additional investments."
Store Openings and Closings
The Company had ten Wet Seal net store openings and three Arden B net store closures during the second quarter. At July 31, 2010, the Company operated 508 stores in 47 states, the District of Columbia and Puerto Rico, including 432 Wet Seal stores and 76 Arden B stores.
Capital Expenditures and Depreciation
During the second quarter, the Company incurred capital expenditures of $11.8 million, of which $9.5 million was for construction of new stores and remodels of existing stores. The Company recognized tenant improvement allowances of $1.7 million associated primarily with new store construction, resulting in net capital expenditures for the quarter of $10.1 million.
Depreciation in the second quarter totaled $4.0 million as compared to $3.6 million in the prior year second quarter.
Third Quarter Fiscal 2010 Guidance
For all of fiscal 2010, the Company now expects to have 25 net Wet Seal store openings and 3 net Arden B store openings. The Company forecasts fiscal 2010 net capital expenditures will be approximately $31 million to $32 million, of which approximately $20 million to $21 million will be for construction of new stores or remodeling of existing stores upon lease renewals and/or store relocations.
Fiscal 2011 Store Growth Plans
Mr. Thomas commented, "As our new stores typically generate strong cash on cash returns and are immediately accretive to earnings, we view this as a good capital investment, even during these challenging economic times. We also continue to gain confidence that expansion into off-mall centers will be a significant driver of the Wet Seal growth plan, along with getting back into our previously high-performing mall locations.
"With this in mind, our Board has authorized further acceleration of Wet Seal store growth in fiscal 2011. Our plan is to open 60 new Wet Seal stores next year, with a focus on off-mall power centers in select markets throughout the country and continued focus on the better malls across the U.S. in which we previously had highly productive Wet Seal stores.
"At Arden B, we intend to continue moderately growing the store base in fiscal 2011 and are in the midst of developin those plans."
Store Openings and Closings
The Company had ten Wet Seal net store openings and three Arden B net store closures during the second quarter. At July 31, 2010, the Company operated 508 stores in 47 states, the District of Columbia and Puerto Rico, including 432 Wet Seal stores and 76 Arden B stores.
Capital Expenditures and Depreciation
During the second quarter, the Company incurred capital expenditures of $11.8 million, of which $9.5 million was for construction of new stores and remodels of existing stores. The Company recognized tenant improvement allowances of $1.7 million associated primarily with new store construction, resulting in net capital expenditures for the quarter of $10.1 million.
Depreciation in the second quarter totaled $4.0 million as compared to $3.6 million in the prior year second quarter.
Third Quarter Fiscal 2010 Guidance
For all of fiscal 2010, the Company now expects to have 25 net Wet Seal store openings and 3 net Arden B store openings. The Company forecasts fiscal 2010 net capital expenditures will be approximately $31 million to $32 million, of which approximately $20 million to $21 million will be for construction of new stores or remodeling of existing stores upon lease renewals and/or store relocations.
Fiscal 2011 Store Growth Plans
Mr. Thomas commented, "As our new stores typically generate strong cash on cash returns and are immediately accretive to earnings, we view this as a good capital investment, even during these challenging economic times. We also continue to gain confidence that expansion into off-mall centers will be a significant driver of the Wet Seal growth plan, along with getting back into our previously high-performing mall locations.
"With this in mind, our Board has authorized further acceleration of Wet Seal store growth in fiscal 2011. Our plan is to open 60 new Wet Seal stores next year, with a focus on off-mall power centers in select markets throughout the country and continued focus on the better malls across the U.S. in which we previously had highly productive Wet Seal stores.
"At Arden B, we intend to continue moderately growing the store base in fiscal 2011 and are in the midst of developin those plans."
The Wet Seal Inc
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