Specialty fashion retailer Wet Seal (NASDAQ:WTSLA) terminated the employment of CEO Susan McGalla on Monday. The company’s board of directors has commenced a search McGalla’s replacement.
In the interim, the company has formed an office of the chairman, led by its non-executive chairman of the board, Hal Kahn. Also during the search period, Ken Seipel, president and COO, and Steve Benrubi, CFO, will serve as co-principal executive officers and members of the Office of the Chairman.
The announcement of McGalla’s departure comes on the heels of six consecutive months of significant declines in the company’s comparable store sales. The company’s comparable store sales for the first three weeks of fiscal July have declined between 13% and 14%. Wet Seal expects the downward trend to continue.
Wet Seal also updated its second-quarter EPS guidance. The company estimates that second-quarter loss will be between 6 to 7 cents per diluted share instead of its initial guidance of a loss between 3 to 6 cents per diluted share. The new estimates do not figure in non-cash asset impairment and CEO severance costs. Those costs will increase the loss per diluted share for the second quarter.
Prior to joining Wet Seal as CEO in January 2011, McGalla was an executive at American Eagle (NYSE:AEO).
WTSLA shares plunged more more than 13% during morning trading.