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Wet Seal Inc (WTSL) is upsetting employees with its store-closure practices
Retail chain Wet Seal Inc (NASDAQ:WTSL) is in trouble. Sure, the shares more than doubled in value on Wednesday … only to land at $0.13. To put that further in perspective, the stock traded around $5 in mid-2013, and in June 2002, peaked at $25.25. But WTSL's troubles extend beyond the charts to its store-closure policies.
A Gulfport, Mississippi, location received a package last week labeled "Store Project." Inside were instructions to pack the store's registers, credit card scanners, and other items. The cryptic "project" had the assistant manager wondering, "how do we function as a business if we've packed up our credit card scanners?"
The answer: You can't. But this was never communicated by WTSL headquarters. Instead, an employee at a nearby store eventually called and broke the news -- the Gulfport site was being shuttered. And, with it, a host of other locations across the U.S. that are now posting signs, venting their frustration with the retailer. It seems WTSL corporate kept all of its store-level employees in the dark about the impending closures.
On the sentiment front, short sellers have been understandably active on the technical underperformer. Specifically, about 18% of Wet Seal Inc's (NASDAQ:WTSL) float is sold short, even though the stock was worth just 6 cents per share prior to yesterday's "rally."