Private equity firm closes deal to buy teen retailer Wet Seal

Private equity firm buys teen retailer Wet Seal

Versa Capital Management has finished its deal to buy Orange County retailer Wet Seal, shutting a chapter on a troubled retailer rocked by turmoil.

Wet Seal, which has been taken private, will maintain its headquarters in Foothill Ranch, the   Philadelphia-based private equity firm said.

Wet Seal will also continue operating 173 stores. The teen retailer filed for Chapter 11 bankruptcy protection in January after it laid off thousands of workers and closed 338 stores, or two-thirds of its locations.

"Our goal now is to further implement the strategies we developed," said Wet Seal Chief Executive Ed Thomas, who will remain head of the company. "Those plans call for optimizing the legacy of the Wet Seal brand and strengthening e-commerce as an important source of new customers and sales.

The company, which got its start in 1962 as a stand-alone swimsuit shop in Newport Beach, has been struggling in recent years to hold onto its youthful customers.

Wet Seal was hurt during the Great Recession as parents cut back on allowances for their children and older teenagers battled unemployed adults for part-time jobs. The company also lost customers as newer "fast-fashion" retailers -- Forever 21, H&M and Zara among them -- profited from their ability to jump quickly and cheaply on the latest trends.

Versa said Wet Seal's operations will be supported by a $15-million senior credit facility by Crystal Financial.

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