Wet Seal will close 338 stores and lay off 3,695 full-time and part-time employees, the company announced on Wednesday.
The mass cuts leave the embattled teen retailer with around 170 stores, about one-third of its fleet, and its e-commerce business.
Ed Thomas, chief executive of Wet Seal, said the company had no choice due to its ailing financial condition, and that the decision was "very difficult to make."
"This is an extremely difficult time for the entire Wet Seal team, and we are doing everything we can to protect the interests of all of our stakeholders, including our employees," Thomas said in a statement on Wednesday. "We acknowledge and sympathize with how hard these recent events have been on our employees, both those staying with the Company and especially those who are leaving the Company this week."
A representative for Wet Seal did not immediately respond to a request for additional comment.
Once a popular destination for mall-going teen girls, Wet Seal has piled up more than $150 million in losses over the past two years, in the face of slowing mall traffic and stiff competition from fast-fashion retailers like Forever 21 and H&M. Last week it received a default notice on $28 million in loans from a creditor. Struggling to reverse its fortunes, Wet Seal has warned that it's low on cash and may have to file for bankruptcy protection.
Some workers lashed out against the company this week for what they said was a cold approach to the firings. Angry employees posted signs at their stores, expressing their displeasure in receiving just one day's notice to find new jobs. Some alleged they were fired for protesting the terms of their layoffs.
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