Wet Seal Files for Chapter 11 Bankruptcy -- Update
13 minutes ago - DJNF
By Peg Brickley
Wet Seal Inc. joined the ranks of teen fashion retailers seeking legal protection from creditors Thursday, filing for Chapter 11 bankruptcy.
Unlike other store chains catering to young women, which are liquidating, Wet Seal says it has an offer of financing from B. Riley Co. LLC that could enable it to salvage some of its business.
The filing followed warnings that Wet Seal was running out of cash, and needed to close stores. Court papers say B. Riley's financing offer provides Wet Seal with "an option to continue as a going concern and potentially generate a recovery for constituents."
The turnaround strategy calls for Wet Seal to reorganize around its e-commerce business and stronger-performing stores, according to papers filed in the U.S. Bankruptcy Court in Wilmington, Del.
In early January, Wet Seal closed 338 stores, firing the workers and handing the keys to landlords. Stores that remain open, along with the online sales business, together accounted for more than half Wet Seal's net sales for the nine months ended Nov. 1, 2014, court papers say.
Terms of the bankruptcy financing call for B. Riley to advance a term loan that may be as much as $20 million, court papers say. If Wet Seal's reorganization strategy plays out, the bankruptcy loan will convert into 80% of the equity in the reorganized company. Additionally, the financing agreement includes $7.5 million in new letter-of-credit commitments.
General unsecured creditors will get the remaining equity in the trimmed-down retailer, under the salvage strategy set out in Wet Seal's court filings. Those lining up for their share of the equity may include investors owed nearly $29 million on senior convertible notes, and trade creditors owed more than $31 million, according to estimates in the company's court papers. That estimate doesn't include claims by landlords at closed stores, which will be "substantial," the company said.
B. Riley has made a market for Wet Seal's stock through its trading desk and followed the company through its research arm, according to the investment bank's website.
Wet Seal has been hunting for money and jousting with landlords in a retail landscape marked with fallen sellers of apparel and accessories to young women, including Deb Shops, Delia's and Body Central. Body Central is dissolving under Florida state law; the Deb Shops and Delia's operations are being broken up in bankruptcy court.
Write to Peg Brickley at peg.brickley@wsj.com
Access Investor Kit for The Wet Seal, Inc.
Visit http://www.companyspotlight.com/partner?cp_co...9618401056
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
January 16, 2015 07:49 ET (12:49 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
13 minutes ago - DJNF
By Peg Brickley
Wet Seal Inc. joined the ranks of teen fashion retailers seeking legal protection from creditors Thursday, filing for Chapter 11 bankruptcy.
Unlike other store chains catering to young women, which are liquidating, Wet Seal says it has an offer of financing from B. Riley Co. LLC that could enable it to salvage some of its business.
The filing followed warnings that Wet Seal was running out of cash, and needed to close stores. Court papers say B. Riley's financing offer provides Wet Seal with "an option to continue as a going concern and potentially generate a recovery for constituents."
The turnaround strategy calls for Wet Seal to reorganize around its e-commerce business and stronger-performing stores, according to papers filed in the U.S. Bankruptcy Court in Wilmington, Del.
In early January, Wet Seal closed 338 stores, firing the workers and handing the keys to landlords. Stores that remain open, along with the online sales business, together accounted for more than half Wet Seal's net sales for the nine months ended Nov. 1, 2014, court papers say.
Terms of the bankruptcy financing call for B. Riley to advance a term loan that may be as much as $20 million, court papers say. If Wet Seal's reorganization strategy plays out, the bankruptcy loan will convert into 80% of the equity in the reorganized company. Additionally, the financing agreement includes $7.5 million in new letter-of-credit commitments.
General unsecured creditors will get the remaining equity in the trimmed-down retailer, under the salvage strategy set out in Wet Seal's court filings. Those lining up for their share of the equity may include investors owed nearly $29 million on senior convertible notes, and trade creditors owed more than $31 million, according to estimates in the company's court papers. That estimate doesn't include claims by landlords at closed stores, which will be "substantial," the company said.
B. Riley has made a market for Wet Seal's stock through its trading desk and followed the company through its research arm, according to the investment bank's website.
Wet Seal has been hunting for money and jousting with landlords in a retail landscape marked with fallen sellers of apparel and accessories to young women, including Deb Shops, Delia's and Body Central. Body Central is dissolving under Florida state law; the Deb Shops and Delia's operations are being broken up in bankruptcy court.
Write to Peg Brickley at peg.brickley@wsj.com
Access Investor Kit for The Wet Seal, Inc.
Visit http://www.companyspotlight.com/partner?cp_co...9618401056
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
January 16, 2015 07:49 ET (12:49 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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NASDAQ DIP and RIP
Here is the best word that describes what i do here.
Intuitive;
means having the ability to understand or know something without any direct evidence or reasoning process.
I was born with it, I'm truly blessed!
Alway's searching for winners'
