Wet Seal Employees Thrown Into The Drink.What Does That Say To Retail?

By Bob Phibbs

Wet Seal Store Closings EmployeeThirty-five years ago I got the order from the boss to go down to the store in Tustin and move everything up to the new store in Pasadena.

I got down there with a truck only to find no one had told the crew.

The store was still open.

They were waiting on customers.

The till still had money in it.

It fell on me to tell them their store was closing at that moment.

Someone had dropped the ball.

Fast forward to yesterday when it was revealed that teen retailer Wet Seal, who I had just mentioned was really struggling in my 2015 Trend Report, was lighting up the Twitterverse with the hashtags #ForgetWetSeal and #BoycottWetSeal.

One tweet included a picture of this

Wet Seal Employee Signs

And another one this

Wet Seal Protest Employee signs

According to Mashable, another sign read, "workers were cheated out of an aggregate 19 weeks of unpaid vacation and sick time, given one day to find new jobs and denied transfers to other Wet Seal locations in the area. This came after the company's now-departed CFO, Steven Benrubi, received a 10.5% raise in March 2013."

The situation reminds me of a sign I saw, If you ever throw me under the bus, you better believe I’m grabbing your ankles and taking you with me!

Employees have commented on their WS Facebook page as well like Alondra Gutierrez, "They sent us an email saying to remove any negative stuff about them or the ones left with unemployed won't get unemployment."

The media rushed to Wet Seal for comment, but no media I'm aware of got an answer-no email or call was returned. We don't know how many of the 528 stores they operated nationwide in November will be closed or may remain open.

Now let’s be honest, when a store has to close, it’s never easy. Especially when it is hundreds of stores.

As a manager, you may have to investigate employees you had trusted prior for stealing. Angry workers may just walk off the job. There will be anger and hurt feelings.  Personnel will feel they’ve lost their legs and worry they won’t be paid.

Stores have closed before, companies have even gone bankrupt, but what we’re seeing here is truly new… employees calling out their company in their own windows.

Wet Seal had prepared a script for their Assistant Managers to read to everyone which you can see on BuzzFeed here.

I get it. Teen retailing is in terrible trouble for the middle market brands like Abercrombie and American Apparel, (again as I talked about in my trend report).  Last week, Wet Seal received a default notice on $27 million in debt, and they have until January 12 to pay the sum to their creditor. Last month, they themselves openly talked about bankruptcy.

And I get it, a retailer whose stock has dropped 97% of its value on slow sales, boardroom drama, and that nasty EEOC investigation that the LA Times reports found evidence that Wet Seal corporate managers “openly stated that to be profitable, the stores had to retain workers with the Armani look - meaning thin, blond and blue-eyed. Wet Seal agreed to pay $7.5 million to settle the lawsuit," presented formidable headwinds.

Here are some of the questions that arose from how this all went down:

How does a brand recover from such a disastrous social media onslaught? Even if they go BK, they could have restructured or someone could have purchased the assets and retooled the brand - when it wasn't a Twitter trending topic.

And while CEO Edmond Thomas has only been there for five months, he isn’t new to the company. His LinkedIn profile shows that he was COO of Wet Seal from June 1992-October 2000, and CEO from October 2007-2011. You have to believe he was a huge force in the company culture.

How does a CEO who initiates something like this reconcile their actions to their stated values?

For that matter…how can anyone in the executive suite hold their heads up going forward to another job?

My Thoughts

Posted mission statements, value statements, and purpose are still the rage for some businesses. Tell investors and workers how you will operate.  Be transparent.

Wet Seal’s value statements?

“We are Real. We have integrity and treat each other with deep respect. We value every member of our team and every person that walks through our doors.”

“We are Invested. We believe in our people, products, processes, and communities and show it by investing in them. We make a difference in the lives of those that we employ and serve.”

And from their LinkedIn company page, “Our collective success is due to the fact that we know our people are our greatest asset.”

Seriously…

Me? My dad used to say, “Fish rots from the head down.” 

Back in 2007, RadioShack laid off employees by email, “The workforce reduction notification is currently in progress," the notice stated. "Unfortunately your position is one that has been eliminated." They still are struggling after treating their team so badly.  

This pales in the light of today’s actions, and it doesn’t look like it’s going to quiet down.

It is tough to be a struggling retailer who has been whipsawed by events both internal and external.

And for those stores that didn’t close today, or tomorrow, or Saturday, good luck getting anyone to work there or shop there.

Unless Wet Seal knew that they were dead in the water and figured this nuclear option of closing stores with no press, no comment, and no regard for their own employees was fine.

From the numerous signs I’ve read, there were loyal staff who felt lied to and who weren’t afraid to show it.

And you know what? It appears their managers, at least Summer Ligon in Virginia, still operated with dignity...

When asked why she removed the handmade signs made by her crew she said, “At first, out of anger, I wanted to leave them up. Then I realized it didn’t make us look good. I wanted us to look professional. I wanted to make sure my girls all got jobs in this mall and [the signs] wouldn’t help their prospects.” 

You can build a business on a person like that… 

The Point

And you know the worst part of all this?

It feeds into every perception in movies, newspapers and culture about a job in a store:

·      It sucks to work retail.

·      You can’t trust large businesses.

·      People are only interested in their own welfare.

Retail as a job will feel the effects of this for years to come – in all forms, from specialty boutiques to mid-priced department stores to luxury brands. 

And what will we as both employers and customers be left with when those who are passionate enough to write a sign and post it in a display window, knowing they too may have taken a nuclear option and torched any chance of a recommendation, leave retail because a company abandoned all hope and threw their employees….their most important asset…into the drink?

Update 1/7/15: Wet Seal Confirms Closing Over 300 Stores; Nearly 3,700 Losing Jobs

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