Losses for Wet Seal Worsen

Teen retailer Wet Seal Inc.’s losses multiplied in its fiscal third quarter as sales continued to slide and the company doled out bonuses to retain key employees.

The Foothill Ranch-based parent of 558 Wet Seal and Arden B. stores reported a net loss of $24.6 million, or 68 cents a share, for the 13 weeks ended Oct. 30.

That compared with a loss from continuing operations of $6.4 million, or 21 cents a share, in the same period last year, when the net loss totaled $7.5 million, or 25 cents.

Sales from continuing operations dropped 16% to $110.8 million and sales at stores open at least a year slid 12.6%, the company reported.

The quarterly loss was 15 cents a share less than Wet Seal had forecast due to better than expected sales, fewer price markdowns and lower costs associated with the company’s strategic review of its business, the retailer said.

The results were released after the close of regular trading, during which Wet Seal’s shares rose 2 cents to $1.64 on Nasdaq. The stock gained an additional 11 cents in after-hours trading.

Wet Seal announced last month that investors had agreed to provide $55.9 million in financing that would allow the retailer to stave off bankruptcy. Shareholders are expected to vote on the proposal in January.

When it revealed the financing, the company also reported the resignation of Chief Executive Peter Whitford. Executive Vice President Joseph Deckop was named interim CEO.

The company also said it had retained Michael Gold, operator of about 400 clothing stores, most of them in Canada, to help revive its business.

Allan Haims, president of the troubled Wet Seal division, has since resigned.

The company declined to reveal the amount of the retention bonuses paid in the quarter.