Wet Seal, An American Clothing Retailer, Announced That Both Shops And Layoffs Should Be Carried Out.

Recently, Wet Seal, an American clothing retailer, announced that it will close 338 stores and remove about 3700 full-time and part-time employees. Wet Seal has warned early last month that it would submit bankruptcy protection applications if it could not meet immediate liquidity needs. The company's share price rose 7.2 cents on Wednesday to 12.7 cents per share, or 130.73%. The company's share price fell by about 98% in 2014.

Because the preferences of the target customers have shifted to H&M, Forever 21 and Zara have the ability to popularize the latest fashions on the display platform to the store's fast fashion brands within a few weeks, including many young people including Wet Seal. Clothing brand Both are in trouble recently. Amazon and other online retailers have also taken many customers through big discounts.

Wet Seal has said before that it has been in the past five quarters. Sale The growth rate has slowed down. Unable to negotiate with the shop owners for proper concessions, the company had to choose to close a large number of stores. A year ago, data showed that Wet Seal had 7413 full-time and part-time employees.

As of the nine months ending November 1st, Wet Seal There is a net sales of $317 million, and the proposed closures are more than half of the total. Wet Seal, which is seeking strategic and financial options, will maintain only 173 stores.

Wet Seal said that closing these stores would have a pre tax expenditure of $5 million 400 thousand to $6 million 400 thousand.

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According to people familiar with the matter, the transaction volume will be about $600 million. The official announcement is expected to be released early next Monday, but Coach is obviously eager to let the good news come to light. An official statement was issued a day later.

Coach said that Sycamore Weitzman, a private equity firm with Stuart Weitzman's controlling shareholder, has signed a formal takeover agreement with a total transaction value of $574 million.

Coach will initially pay $530 million in cash. If Stuart Weitzman can achieve its anticipated sales target in the next three years, Coach will add an additional $44 million.

Coach will use its own funds or support from credit markets and capital markets. The acquisition is expected to be completed by May of this year, in accordance with the provisions of the Convention and the Hart-Scott-Rodino anti trust Improvement Act. After excluding the impact of transaction related costs (including acquisition related expected accounting adjustment and payment), the acquisition is expected to increase Coach earnings per share (EPS).

Stuart Weitzman has maintained a strong momentum over the past five years, with an annual compound average annual growth rate of 10%. The expansion of sales channels, the rise of e-commerce and the growth of same store sales have promoted brand growth. In fiscal year 2014 (September 30th 2014), Weitzman's sales net income amounted to US $300 million. After the transaction is completed, the brand founder and CEO, Stuart Weitzman, and the existing management team will continue to be responsible for brand operation.

Both sides have high expectations for the acquisition. Coach's CEO, Victor Luis said in a statement, "Stuart Weitzman is the famous brand of high-end shoes for women in the United States. It has maintained steady growth in the past and has great potential in both local and international markets." Luis added that the strategic focus of Coach after the acquisition is still the transformation of its own brand Coach. The brand size of Weitzman and the retention of the existing management team will ensure that Coach successfully takes over Weitzman. Stuart Weitzman, "I also return the prize," for us, Coach is a good strategic partner. They respect our culture and are willing to provide us with resources and global business experience to help us develop all potential of the brand. "

However, the market did not seem to be very optimistic about the deal. After yesterday's news, Coach's share price has advanced, and it has closed down 36.30 US dollars, down 1.17% from the previous trading day, down 36% from a year ago.