Foothill Ranch, CA-based teen apparel retailer Wet Seal has received a notice of default on $27 million of debt, with the total amount due amounting to $28.8 million, plus collection and attorney fees and other costs.
Last week the struggling retailer was able to secure a two week reprieve, thanks to a forbearance agreement with creditor Hudson Bay Master Fund Ltd. that expires Jan. 12.
The retailer warned earlier that it could face bankruptcy if it couldn’t get a handle on its cash issues.
If it can't get a handle on its liquidity issues pretty soon, Wet Seal could soon join Delia’s as a teen clothing retailer that hasn’t been able to overcome teenagers' reluctance in recent years to spend much on apparel. The retailer has also struggled to compete online, and the holidays apparently haven't given the retailer much-needed relief.