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Wet Seal Executive Quits Amid Falling Profits

Retailing: Edmond Thomas steps down as president, chief operating officer of the Foothill Ranch company.

October 04, 2000|LESLIE EARNEST | TIMES STAFF WRITER

Specialty retailer Wet Seal Inc., struggling for the last year since it misjudged its market for young women's apparel, said late Tuesday that its president and chief operating officer has resigned.

Edmond Thomas, who has been with the Foothill Ranch company since 1992, will depart effective Oct. 13. Thomas was responsible for Wet Seal's financial management, merchandise distribution, real estate and other matters.

Thomas could not be reached for comment. A company executive would not comment, and Kathy Bronstein, Wet Seal's chief executive, was not available for comment.

In a news release, Wet Seal said it has not yet selected a successor for Thomas.

Wet Seal, which has posted declining earnings in the last two quarters, said it will take a pretax charge of $1.65 million, or 8 cents a share, in the third quarter to cover his severance package.

The severance consists of that payment plus his profit-related bonus for the year that ends on Feb. 3, the company said. He also will have four months to exercise vested stock options, of which he had 120,000 at the end of January. Options that are not vested will be forfeited, the company said.

Thomas had a contract that extended through the end of January 2005.

Last year, Thomas earned more than $1.2 million in salary and bonus, and was awarded options to buy 34,599 shares of company stock, according to the latest proxy statement filed with the Securities and Exchange Commission last spring.

Analysts said earlier this year that Wet Seal has been unable to come up with the right mix of clothes to please its fickle young female customers. Last month, the retailer posted an 88% decrease in net income for the second quarter on lackluster sales. It earned $460,000, or 4 cents a share, compared with $3.69 million, or 29 cents, in last year's second quarter.

Recently, the company hired several new executives: Greg Scott as president of the Arden B division, Steven Cox as senior vice president of the Wet Seal/Contempo Casuals division and Steven Strickland as senior vice president of creative and marketing.

The company's stock price closed Tuesday at $15.06 a share, down 56 cents. While the stock is up almost 23% since the start of the year, it is down 10% over the last 52 weeks.

The company operates 567 stores under the names of Wet Seal, Contempo Casuals, Arden B. and Limbo Lounge.

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