Wet Seal Will Launch 4th Clothing Chain

Wet Seal Inc., the red-hot young women’s apparel retailer, plans to launch its fourth clothing chain this year.

Arden B. will be aimed at a slightly older and more affluent customer than the 13- to 18-year-old market targeted by the company’s 390 Wet Seal and Contempo Casuals stores.

Initially, Wet Seal will open at least five Arden B. stores but could open as many as 50 this year if the right real estate deal comes along, President Edward Thomas said Wednesday.

“We are definitely pursuing this as a spinoff strategy,” Thomas said.

The new concept meets an undernourished market in apparel retailing, “the 16- to 28-year-old who is looking for a little better quality than she can find at Express, and something that she can wear to the office, or out at night,” said Kelly Armstrong, an analyst at Wheat First Butcher Singer Securities. “It’s a perfect fit because Wet Seal is very experienced in women’s apparel, and this should not cannibalize sales from their other stores.”

Arden B. is the result of Wet Seal’s failed bid to buy Los Angeles-based Rampage Clothing Co. out of bankruptcy last year. Wet Seal had loaded up on merchandise to stock the 18-store Rampage chain but was outbid. Wet Seal instead developed the merchandise into a line it dubbed Arden B. The line was put in 28 Wet Seal and Contempo Casuals stores, and appeared in Wet Seal’s recently debuted catalog.

Strong sales convinced company officials that the line could be viable as its own chain, Thomas said.

In addition to Wet Seal and Contempo Casuals, the company also operates a five-store chain called Limbo Lounge, a unisex concept that offers clothing, accessories and items for the home. Wet Seal plans to open five to seven more Limbo Lounges this year, including one in the second phase of Irvine Spectrum Center.

Wet Seal is one of the bright spots in an otherwise lackluster fashion industry. Analysts expect the company’s annual profits for the just-completed fiscal year to climb about 37%, to about $21 million. Its stock price, meanwhile, is up 32% the past 12 months, closing Wednesday at $31.13, up $1.18, in Nasdaq trading.