The headlines hit the wires in January 2017: Teen fashion retailer Wet Seal had shut down after 55 years in business. Once a wildly popular mall store, Wet Seal suddenly became another sign of changing times. Despite acquisitions and new store brands, the company could not survive a world where shopping didn’t always happen at the mall.
Here’s the story of what happened to Wet Seal.
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The early years
Lorne’s > Wet Seal > New Owner > Merchandise Expansion > Public Company
Wet Seal opened its doors as Lorne’s in 1962, launched by entrepreneur Lorne Huycke. The shop sold beachwear in Newport Beach, Calif. Lorne’s wife reportedly inspired the name change to Wet Seal after using the phrase to describe a bathing suit she saw at a fashion show.
In its first 20 years, Wet Seal expanded to 17 stores, all located in California. The expansion took a toll. By 1980, Wet Seal was reportedly burdened by debt and struggled with profitability.
In 1984, Canadian retailer Suzy Shier bought the retailer for $2 million. The owner’s new management team promptly expanded the collection to include juniors sportswear. Selling patterned miniskirts alongside colorful bikinis turned out to be brilliant. Teen girls flocked to Wet Seal stores, more locations opened, and sales grew 900% between 1985 and 1989.
The public years
Continued expansion > Tough times > Contempo Casuals acquisition > Failed experiments
Wet Seal went public in 1990, raising $37 million to pay down debt and fund continued expansion. By the end of that year, the retailer had 93 stores across five states. The company continued adding locations in the early 1990s, but profits and then sales begin to falter.
In 1995, Wet Seal purchased women’s retailer Contempo Casuals in a stock transaction valued at $1 million. Contempo Casuals had been very popular in the 1970s but lost money in 1994. The deal included Contempo’s 237 stores and immediately gave Wet Seal a national footprint.
In the late 1990s and early 2000s, Wet Seal experimented with expansion efforts, including:
- Launch of Limbo Lounge, a unisex store for teens with an entertainment focus
- Acquisition of Britches Great Outdoors stores
- Acquisition of Episode stores
- Launch of Arden B, a chain targeted women aged 20 to 40
- Acquisition of Zutopia stores, targeted girls aged 5 to 12
Wet Seal also attempted to buy competitor Rampage out of bankruptcy, but lost the bid to another teen store Charlotte Russe.
Things fall apart
Financial losses > shake-ups > bankruptcy
Spread too thin, Wet Seal began closing or converting all Limbo Lounges and Contempo Casual stores to its legacy brand in the early 2000s.
In April 2002, Wet Seal stock sold for about $25 per share. By November 2004, the stock price had fallen to $1.45. In the interim, the company’s same-store sales declined, contributing to a $102.8 million loss in the second quarter of that year. Also in 2004, Wet Seal also announced the closure of all Zutopia stores.
The company continued to limp along for several years. By early 2010, the stock price had moved into the $3 range.
Clinton Group
Hedge fund and Wet Seal’s third-largest shareholder Clinton Group won control of the company’s board in 2012. The investor had previously pushed for Wet Seal to sell itself, but then changed course and predicted a turnaround. A flurry of management changes followed, along with an ugly discrimination lawsuit.
Wet Seal lost $113 million in 2013 and closed all Arden B stores in 2014.
In January of 2015, Wet Seal defaulted on its debt, closed 338 stores, and filed for Chapter 11 bankruptcy.
Versa and the Gordon Brothers
Versa Capital Management LLC bought Wet Seal at auction in 2015.
With a plan to refresh its collection and return to the graces of the teenage girl, Wet Seal continued on. The company eeked out some margin improvement in 2016, but it was not enough. Versa declined further financing and Wet Seal announced closure of its remaining stores in 2017.
Gordon Brothers, a branding firm and liquidator, bought the Wet Seal brand in 2017 for $3 million. According to Retail Dive, Gordon Borthers still owned the brand as of January 2025.
Can you still shop Wet Seal?
You can no longer shop Wet Seal.
Wet Seal’s Instagram has been dormant since 2021. WetSeal.com was a functional ecommerce shop before undergoing a redo in March 2022, according to Wayback Machine. The website revived briefly that year with a lookbook and no online sales before disappearing again.
There is an ecommerce shop at thewetseal.com. The store implies a connection to the original brand, but it’s likely unrelated. The contact information is generic and none of the social media links are functional.
Teen shops that survived
Teens no longer have Wet Seal, but they do have these options for trendy fashion with a California slant:
What happened to Wet Seal?
Wet Seal had a moment in the sun but could not convert it into a sustainable business. Too many failed experiments left the company unable to compete with faster, more efficient competitors. That proved fatal when mall traffic declined and fickle teens found other sources for the bright, flirty styles they craved.