Facing descending sales and a racism lawsuit, the well-known teen retailer, Wet Seal Inc. has recently sacked its CEO (Chief Executive Officer) Susan McGalla, and began looking for a suitable replacement.
Meanwhile, the Foothill Ranch Company told that it will be guided by Chairman Hal Kahn, Chief Financial Executive Steve Benrubi, and President Ken Seipel as members of the recently created Office of the Chairman. During last year, the company has witnessed its stock price plunge and sales drop at its nearly more than 550 outlets that are spread all over the country.
In May 2012, the firm had informed that it would reduce costs by locking some Arden B. Stores and starting fewer Wet Seal outlets. Recently, the group has reduced its outlook for the present quarter, which will end by 31st July, and registered that the product sales in stores started at least a year reduced 13 to 14 percent in the first 3 weeks of July.
The retailer did not actually detail why McGalla was sacked, but her term has been largely marked by descending sales and dropping stock prices as the company, whose shops cater to young women and has in fact tussled to plea to its core teenaged consumer.
In 2011 January, McGalla developed into Chief Executive of the Wet Seal, after functioning as President and Chief Merchandising Official of the direct competitor American Eagle Outfitters Inc. At the same time, the retailer is confronting a racial-discrimination court case registered by 3 former Managers who claim that the firm had a top policy of favoritism against African American employees.
Completely denying all these allegations, the company said that it has a very diverse labor force and consumer base, and will dynamically stand up for this matter. McGalla refused to comment on this particular issue. In an email sent to the Senior Management recently, she mentioned that the board of directors sacked her through phone.
She recognized that Wet Seal Inc has been coping with many long-standing challenges at present. She said that she will respect the decision taken by the Broad of Directors, and expressed that she was proud of what the company has accomplished during her tenure.
In reducing its outlook for the present quarter, the company told that after revenue dropped nearly 8.8 percent in May 2012, and 9 percent in June; it predicts revenue to drop to 10 to 11 percent in the 2nd quarter. The retailer also anticipated a loss of around 6 to 7 cents a share in the present quarter, which is up from its earlier estimate of a defeat of around 3 to 6 cents/share.