Wet Seal's Intellectual Property Sells at Auction for $3M
Liquidator Gordon Brothers Group announced last week that it has won the auction for the intellectual property of the Wet Seal LLC with a bid of $3 million, besting the $1.5 million initial offer from Canadian retailer YM Inc., people familiar with the matter said. Wet Seal filed for bankruptcy last month with a plan to close its approximately 142 stores located primarily in U.S. malls. Wet Seal currently has liabilities between $50 million and $100 million. A U.S. bankruptcy court judge must still approve the sale.
Total Retail’s Take: Wet Seal, founded as a "bikini shack" in Newport Beach, Calif. in 1962, has been on a downward trajectory since 2015, when it filed for bankruptcy for the first time as it fell victim to the fast-fashion craze attracting the attention of its young, female customer base. Versa bought Wet Seal out of that bankruptcy, but failed to find financing for the business. Hopefully liquidator Gordon Brothers will be able to revive the brand, especially since it has a reputation to revive dormant brands it often acquires out of bankruptcy. Other U.S. specialty apparel chains, including The Limited, American Apparel and Aeropostale, have also filed for bankruptcy in recent months, as the retail sector undergoes a major upheaval.