Versa Capital Management said it has won the auction for bankrupt teen retailer the Wet Seal Inc.
The Philadelphia-based private-equity firm said the deal will be presented Wednesday to the U.S. Bankruptcy Court in Delaware for approval.
Under the purchase agreement, Versa would acquire all of Wet Seal's assets, according to a statement.
“We believe our agreement with Versa provides the best possible outcome for our creditors, employees, customers and other constituents,” said Ed Thomas, chief executive of Wet Seal, in a statement. “We are focused on executing an orderly emergence from bankruptcy court supervision and collaborating with Versa to improve the operational and financial performance of the business.”
The Foothill Ranch company filed for Chapter 11 bankruptcy protection in January, a week after it closed two-thirds of its stores and laid off thousands of workers.
In the last few years, the retailer suffered as parents cut back spending and older teens battled unemployed adults for part-time jobs. "Fast-fashion" retailers like Forever 21, H&M and Zara were able to profit by jumping quickly and cheaply on the latest trends.
Wet Seal, which specializes in beachy fashion for young women, now has 173 locations and its online business.
Versa’s portfolio also includes investments in Sports Chalet and Black Angus Steakhouse.
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