Wet Seal Unveils Line Designed to Revive Sales

At Wet Seal Inc.’s annual meeting Thursday, the seven directors of the teen clothier -- men in suits and ties with an average age of 66 -- sat on the dais as a music video showed young people dancing suggestively. Next to the staid men were mannequins adorned in short skirts and low-slung jeans.

The disconnect didn’t escape shareholders.

Might Wet Seal consider adding “new blood with some fresh ideas” to the board, a man in the audience asked? Some women, perhaps?

Chairman Irv Teitelbaum, 65, assured those assembled at the Westin South Coast Plaza Hotel in Costa Mesa that the board is seeking female directors.

But the composition of its board is the least of Wet Seal’s problems. The Foothill Ranch-based retailer must convince Wall Street that it can reverse nearly two years of losses and sliding sales and lure back free-spending teenage girls, the company’s core customers.

On Thursday, Wet Seal whetted investors’ appetites with a taste of the back-to-school fashion line designed by Creative Director Victor Alfaro. The company has pitched Alfaro’s fall apparel as vital to returning the retailer to profitability.

“I think it’s very hip and young,” said Chief Executive Peter Whitford, praising Alfaro’s ensembles, which included a silky three-layer pleated skirt paired with a feminine blouse and a men’s-style plaid jacket with herringbone sleeves, adorned with bejeweled broaches.

The retailer will unveil more of the line in New York next month at the behest of analysts, who have been clamoring for a look at the styles that will begin arriving in the company’s 472 Wet Seal stores July 12.

After getting an early glimpse of the merchandise, analysts who attended the annual meeting offered favorable, if somewhat guarded, reviews.

“Just look at the jackets, the finishes, the detail,” said Elizabeth Pierce from Sanders Morris Harris. “What I like is it’s not predictable.”

Still, she cautioned, “It remains to be seen whether it will resonate” with Wet Seal’s target market.

Adrienne Tennant, an analyst at Wedbush Morgan Securities, had some doubts about the new line too. “I can’t visualize it in the stores. We just had a few pieces of it to see.” Still, she said Alfaro had hit on the right trends with his designs for short skirts and tweeds.

Wet Seal’s stock closed at $5.64, down a penny, on Nasdaq. The stock has lost 43% of its value over the last year.

After the meeting, Alfaro spoke briefly about his new line, which he is calling “Vintage Angels” and “Granny Chic” because of such details as large broaches, belts with outsize buckles and colorful crocheted scarves.

“I’m a believer in sexy clothes, simpler clothes, not complicated clothing,” said the Mexican-born designer, who wore jeans, a black shirt and a black sports coat.

Alfaro, 41, designed under his own label in the 10 years before signing with Wet Seal in 2003. In 1999, he launched a ready-to-wear line named VIC.

Although analysts want to see more of his offerings, it’s far from certain they’ll be able to predict whether Wet Seal’s fickle young customers will buy them.

Analyst Jeffrey Van Sinderen of Buckingham Research Group acknowledged that “it’s very tough for me to say that I’m in tune with what the teenage girl wants to buy.”

Whether a board composed of more women would be more in sync with their customers’ tastes is arguable. The last woman to serve on Wet Seal’s board was Kathy Bronstein, the company’s chief executive for 11 years. She was fired by Chairman Teitelbaum in February 2003 because of fashion misfires that led to poor sales and a slumping stock price.

Van Sinderen said, for his part, it doesn’t matter whether the board is composed of male or female directors “as long as they have the right background.”