Wet Seal Enters Financing Talks
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Youth-oriented retailer Wet Seal Inc. said Wednesday that it was in talks to raise $40 million through a private investor as the cash-strapped company struggled to win back its dwindling customer base and avoid a bankruptcy filing.
The Foothill Ranch-based company said it was considering issuing $40 million in convertible notes to S.A.C. Capital Management, a private investor that already owns about a 4.5% stake in the retailer. The company would then seek shareholder approval.
Wet Seal has said it would have as little as $11 million in cash left by the end of its fiscal third quarter. It acknowledged in its latest quarterly report that Chapter 11 bankruptcy protection was an option.
Wet Seal shares fell 12 cents, nearly 7%, to $1.60 on Nasdaq.
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