FOOTHILL RANCH, CA—Two days after store employees took to social media to protest closings on short notice, fashion retailer the Wet Seal Inc. made it official, announcing Wednesday that it was shuttering two-thirds of its brick-and-mortar locations, effective immediately. The Foothill Ranch, CA-based chain said the 338 stores it's closing represented about 48% of its net sales for the first nine months of 2014, and that following the closings it would operate 173 retail locations in 42 states and Puerto Rico in addition to its Internet business.

It's not certain whether the closings, which follow more than $150 million of losses over the past two years, will be sufficient to shore up Wet Seal's balance sheet. Shortly after Christmas, the company said in an SEC filing that “there is substantial doubt” about its ability to continue as a going concern.

Third-quarter '14 results reported last month included a net loss of $36 million, or 43 cents per diluted share, an increase of nearly 300% year over year. Further, Wet Seal said in a Dec. 27 SEC filing that it was in default on $27 million in debt and had a deadline of Jan. 12 to repay the creditor, Hudson Bay Master Fund Ltd.

Regarding the store closings—up from about 60 that Wet Seal expected to close when it announced its Q3 earnings—CEO Ed Thomas says it was “a very difficult decision to make, but after reviewing many other options since I returned to the company in September, our financial condition leaves us no other alternative than to close these stores. This is an extremely difficult time for the entire Wet Seal team, and we are doing everything we can to protect the interests of all of our stakeholders, including our employees.”

Thomas who had left the company in 2011, rejoined as CEO this past September, marking the company's third change of leadership in as many years. Following Wednesday's announcement, shares of Wet Seal stock were up nine cents to 14 cents per share as of 12:30 p.m.

The chain's performance has been hurt in recent years by competition from other fast-fashion retailers, notably H&M and Forever 21, by competition from online sales channels and by general declines in foot traffic at shopping malls. A report earlier this month on CNN Money cited Wet Seal as one of five apparel chains that have fallen out of favor with young adult consumers; the others were Aeropostale, American Apparel, Abercrombie & Fitch and American Eagle Outfitters.