Delia’s (DLIAQ) and Deb Shops filed for bankruptcy in December. That’s 438 more vacant storefronts across America. Now Wet Seal (WTSL) will close at least 338 more stores, and likely all 500 when they file for bankruptcy in the next couple weeks. Then the biggie. RadioShack (RSH) will end up closing 5,000 locations when they file for bankruptcy in the very near future. Once the financial results are reported in February for all the major retailers you will see announcements from Sears (SHLD), JC Penney (JCP), Macys (M) and many others closing hundreds or thousands of more stores. Sure sounds like a consumer driven economic recovery.

Wet Seal may be too late to stave off bankruptcy

By Andria Cheng

Published: Jan 7, 2015 12:16 p.m. ET

Teen retailer is closing most of its stores and laying off staff

NEW YORK (MarketWatch)—Teen retailer Wet Seal Inc. (WTSL) said Wednesday it is shutting two-thirds of its stores as it races to shore up liquidity and keep its operations afloat. But it may be too late to avoid the fate of former rivals Delia’s and Deb Shops, which filed for bankruptcy protection in December.

Already, a lender on some of the company’s senior convertible notes has issued a default notice with a deadline of Jan. 12. Unless Wet Seal meets its obligations or strikes a new agreement, the company is facing bankruptcy, said former bankruptcy attorney David Tawil of hedge fund Maglan Capital.

“I don’t think that there is a good chance (of it surviving) unless there is a trick up someone’s sleeve that we haven’t seen yet,” Tawil told MarketWatch. “It has been a long time coming.”

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The teen sector has generally underperformed the broader retail segment, and other companies including Aéropostale Inc. ARO, +2.23% and Pacific Sunwear PSUN, +4.55%  also are expected to shut stores this year. The sector is battling the trend in which teens are shifting spending to electronics and other items over fashion.

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