FOOTHILL RANCH, CA-Financially struggling Wet Seal Inc. has chosen a new CEO with experience in such difficulties, chairman Joel Waller of Wilsons Leather, which has been through a series of restructuring and store liquidations in connection with its own financial struggles. Waller will step into the CEO post at Wet Seal on Feb. 1, according to Henry Winterstern, chairman of Wet Seal, who says Waller will bring “the necessary mix of management skills and retail knowledge to help us restructure our business and return the company to profitability.” The new Wet Seal CEO will succeed Joseph Deckop, a former EVP at the company who has served as interim CEO since November, when former Wet Seal CEO Peter Whitford resigned. Deckop will remain with the company.

The naming of Waller “is probably a smart move, but the million dollar question is, is it enough?” says Doug Fleener, managing partner of Lexington, MA-based Dynamic Experiences Group, a retail consulting firm. “Wet Seal clearly wanted to bring in an experienced retailer, which is different from many situations in which they will look for someone who is very fashion oriented.”

One of the questions surrounding Wet Seal is whether the company is headed for bankruptcy. In its latest quarterly report, for the third quarter ending Oct. 30, the company’s loss nearly quadrupled from the previous year, with the financially struggling retailer reporting it lost $24.6 million for the period. The company skipped its customary conference call to discuss financial results.

Fleener, a 25-year retail industry veteran whose career includes posts with the Bose Corp. and the Sharper Image, says that it’s hard to say whether the appointment of Fleener means that the company thinks it will wind up in Chapter 11. “I don’t know if we can read into it that they’re going to go that direction or not” he says, “but it is clear that they wanted someone who has been down the route that they’re traveling now in terms of having difficulties.” Choosing Waller “makes a lot of sense,” Fleener comments, adding, “I guess the fashion folks might ask if he has the fashion background necessary to do it, but we’re seeing Paul Pressler do a pretty good at Gap.” Waller has spent more than 27 years in the retail industry and before joining Wilsons he was divisional merchandise manager for Bermans The Leather Experts, one of a number of senior management positions he held.

Waller will inherit a Wet Seal operation of 559 stores in 47 states, the District of Columbia and Puerto Rico, including 463 Wet Seal stores and 96 Arden B. stores. During the most recent quarter, the company closed four of its stores.

“He’s definitely going to have his hands full because he’s going to have to make a pretty big transition in who they are and what they sell,” Fleener says. He says Wet Seal’s fundamental problem is that its mainly teen market fell out from under it. “When you try to ride teen fashion, you’re going to ride it up and you’re going to ride it down,” he says.

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