Wet Seal Sues Bebe Over Hiring of CEO

Wet Seal Inc., a retailer of clothing for young women, said Monday in a lawsuit that rival Bebe Stores Inc. improperly hired the former president of Wet Seal’s Arden B. division as chief executive.

The suit, filed in Orange County Superior Court, claims that Greg Scott, who resigned as president of Arden B. last month, violated his employment agreement and that Bebe may have misappropriated confidential information.

Scott last week was tapped as the top officer at Brisbane, Calif.-based Bebe, where he was vice president of merchandising from 1996 to 2000.

Wet Seal’s suit claims that Scott violated his contract’s non-compete provision and that Bebe has unlawfully solicited key employees of Arden B.

Foothill Ranch-based Wet Seal also said it has started arbitration proceedings against Scott.

Scott didn’t immediately return calls seeking comment. A call to Bebe Chief Financial Officer Walter Parks, who until late last year was Wet Seal’s chief administrative officer, wasn’t immediately returned.

While at Wet Seal, Scott was credited with turning its 4-year-old Arden B. chain into a trend-setting player in the young women’s contemporary apparel niche and into the company’s best-performing division.

Over the last 18 months, Wet Seal, the operator of 474 Wet Seal, 99 Arden B. and 31 Zutopia stores, has struggled to recover from slumping sales and earnings. The company has forecast a loss for the quarter ended Jan. 31.

Shares of Bebe, which operates 187 stores, fell 47 cents to $27.25, and Wet Seal shares fell 16 cents to $8.49. Both trade on Nasdaq.