Fast-Growing Wet Seal Makes Its Mark as Trendy Retail Chain
Once upon a time, a chain of junior sportswear chains succeeded because it was good at telling stories. At least that is what its executives say.
Wet Seal, which expects to expand this year from 46 to at least 66 stores throughout the state, has emerged as a leader by creating fashion “stories”--displaying a contrasting mix and match of tops, pants, shorts and jackets all together in one spot so that its customers know what colors, clothes and accessories can be combined.
“If a color combination is blue, Wet Seal will have 37 things to go with that blue,” said Linda Petrosino of Mirrors, a Los Angeles-based junior sportswear manufacturer. “Then 3-4 weeks later, they’re into another color story.” In Southern California’s competitive junior market, “that’s really important because the customer always wants something that’s new.”
For Wet Seal, the mixing and matching has paid off very well indeed. Company executives expect sales this year to climb at least 29% to more than $40 million from $31 million in 1987. Its stores annually gross $280 per square foot, executives of the Irvine-based chain said, compared to an industry mean of about $218 per square foot for comparable outlets.
For trendy manufacturers, it’s the place to be seen. For trendy retailers, it’s the place to snoop on one of the hottest competitors around.
“They’re one of the important accounts for any manufacturer to have his merchandise displayed in California,” said Joel Knapp, a principal with Judy Knapp Co., a leading Los Angeles-based junior sportswear maker that supplies Wet Seal.
“They’ve captured the young, junior customer who wants something new all the time. All the other retailers go to them, to see what they’re doing,” agreed Petrosino, a designer and secretary-treasurer of Mirrors.
Clientele Mostly Young
Wet Seal caters to teen-age girls and young women from 14 to 25 years old. On a recent weekend, compact discs of the Cure and INXS were playing on the sound system as mini-skirted, Walkman-toting young shoppers browsed through racks of wild batik prints, subdued denim and floral prints, and eye-popping acid brights.
Even so, the average 3,500-square-foot store has some merchandise that will appeal to the junior customer’s diminutive 35-year-old mother who wants the very newest look.
“I hope you get this outfit. I love it,” Linda Remley of Irvine told her 18-year-old daughter, Lisa, during an hour or two of shopping at the Wet Seal in Costa Mesa.
Linda Remley, who describes herself as “under 40,” often swaps her size 4 or 5 clothes with Lisa. By mid-morning, mother and daughter--both Wet Seal regulars--had spent $104.94 for two shirts, a pair of shorts, a jacket and earrings. What made shopping easy, Linda Remley said, was the store’s display. “They have the outfits already picked for you,” she explained.
Nearby, Kristin Hoyt was busy shelling out $40.28 for “the bathing suit of the year. This is it.” The 17-year-old Woodbridge High School senior shops at Wet Seal every month or so because the clothes are trendy and “they seem more aimed toward my age group.”
The customers were responding to two ingredients that industry observers say is crucial to Wet Seal’s success: being first with the newest merchandise and displaying it in six to eight combinations.
Uses High Displays
“They react very quickly. If something becomes very hot, they get it in there immediately then present it very well,” said a buyer for a competing specialty chain who asked not to be identified.
One trick of the trade is Wet Seal’s tactic of displaying about 20% of its stock 6 to 10 feet above customers’ heads, while most other chains typically have a few random skirts or tops displayed on the walls. Half a dozen salesclerks volunteer to spear the garments down for shoppers.
The idea is to show clothing combinations where they can’t possibly be missed, while also increasing each store’s display space.
“We’ll make a presentation on the walls and mannequins, then support it with inventory in the racks. That makes it easier for the customer to shop off the floor racks,” said Kathy Peckham, a minority owner and Wet Seal’s executive vice president who oversees the three buyers.
The matching doesn’t stop at the clothes racks, either. “If we’re doing a blue floral look, the accessories buyer is expected to bring in the right shade of blue for earrings, necklaces, socks, sashes, hats and belts,” said Wet Seal President Ken Chilvers.
Grouping merchandise by color, fabric and manufacturer encourages multiple sales.
“They focus in on a few select trends then pull a lot of single pieces together in a display,” said Barbara Fields, president of Barbara Fields Buying Office in Los Angeles. “It’s the professionalism in which they approach the market and carry it through,” added Knapp. “They’re among the best I have ever seen.”
Started 30 Years Ago
So while nobody stays on top forever, at least for now Wet Seal has become fierce competition for such specialty chains as the Limited Express, Contempo Casuals, Seattle-based Jay Jacobs Inc. and San Diego-based Charlotte Russe. The chain is also causing some worry at the junior departments of major stores such as the Broadway, May Co. and Nordstrom.
It’s a far cry from the outfit that began operating out of a one-man swimwear shop on Balboa Island almost 30 years ago. By the late 1970s, the original owner sold what had become 12 stores to three employees. They, in turn, broadened Wet Seal’s merchandise line to include junior women’s sportswear and began opening stores in regional malls.
Almost four years ago, in June, 1984, the Canadian retail chain Suzy Shier wanted to expand into Southern California. Wet Seal seemed ideal because of its 17 stores. Suzy Shier became the majority owner, and Chilvers, company president, bought a minority interest.
With new management in place, Wet Seal sharpened its fashion focus and upgraded its stock. New merchandise gets a two-week test. If an item seems glued to the racks, “we know it right away,” Peckham said. And out it goes.
The chain was able to emerge “because they got a management team in there that was able to put fashion in front of the customer,” said a major supplier who asked not to be identified. “At the same time, two dominant retailers--Contempo Casuals and Judy’s--clearly hadn’t kept up with the times. And the consumer responded.”
Plans to Expand
The response has been so strong that today there are Wet Seals in every mall in Orange County. The chain’s stores stretch from Eureka to San Diego. More are to open soon in San Bernardino, Lakewood, Pasadena, then in Marin County and the San Francisco area.
By next year, Chilvers expects Wet Seal will move outside California, most likely into Seattle, Hawaii, Washington or Arizona. The chain also is eyeing Oregon, Utah, Nevada, Texas, Florida and Georgia as possible sites for new stores further in the future.
At its corporate headquarters in Irvine, Wet Seal employs about 60, with a companywide total of more than 700.
While there has been some sales slowdown--as in the rest of the retail industry--since the stock market crash last fall, Chilvers and Peckham don’t seem worried.
Many observers agree they don’t need to. “Wet Seal has all the ingredients in place to do a good job (expanding) right away,” said one manufacturer who supplies the chain. “They’ll potentially be able to do as well as anyone can in this environment.”
