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Press release from Business Wire

The Wet Seal, Inc. Announces July Comparable Store Sales Declined 15.6%

<p class='bwalignc'> <b>Comments on Near-Term Merchandising Actions;</b> </p> <p class='bwalignc'> <b>Updates Second Quarter EPS Guidance</b> </p>

Thursday, August 02, 2012

The Wet Seal, Inc. Announces July Comparable Store Sales Declined 15.6%07:00 EDT Thursday, August 02, 2012 FOOTHILL RANCH, Calif. (Business Wire) -- The Wet Seal, Inc. (Nasdaq: WTSLA), a leading specialty retailer to young women, reported net sales and comparable store sales for the four-week period ended July 28, 2012, or fiscal July, and the fiscal second quarter ended July 28, 2012, as follows:   Fiscal July               Comparable Store Sales Net Sales % Change     % Change From     $ in Millions     Last Year This Year     Last Year Wet Seal $ 34.3 -13.3 % -15.9 % 7.8 % Arden B   6.1     -10.8 % -14.1 %     5.0 % Total $ 40.4     -12.9 % -15.6 %     7.4 %     Fiscal Second Quarter               Comparable Store Sales Net Sales % Change     % Change From     $ in Millions     Last Year This Year     Last Year Wet Seal $ 113.7 -9.0 % -11.0 % 6.2 % Arden B   21.6     -9.1 % -11.6 %     5.0 % Total $ 135.3     -9.1 % -11.1 %     6.0 %   E-commerce sales declined 6% and 5% in fiscal July and the fiscal second quarter, respectively, as compared to declines of 17% and 13% in the prior year fiscal month and quarter, respectively. Hal Kahn, Chairman of the Board of The Wet Seal, Inc., said: “The second quarter ended with weak July sales results. We believe the Company's performance in recent quarters is due in part to a move away from some of our fast fashion merchandising practices at Wet Seal that had been successful in the past. Price points were elevated in many product categories, and we believe the Company ceded a key part of its customer base. “Starting last week, I began to set merchandising direction for the Company. I am leading the Office of the Chairman, which also includes President and Chief Operating Officer Ken Seipel and Chief Financial Officer Steve Benrubi. We are taking immediate steps to return key elements of our prior core strategy, which include improving the speed and agility of our buying practices, expanding assortment breadth and adjusting prices to ensure we offer fast fashion at a value. We believe these initiatives will result in improved sales performance and enable us to, again, attract a broader customer demographic to Wet Seal, including the younger teen, which we may have lost during the past year. “As of quarter-end, we estimate total inventory dollars per square foot decreased 4% versus the prior year, with Wet Seal down 2% and Arden B down 21%. Entering the third quarter, we have positioned inventories in both divisions to enable us to replenish and offer more relevant fashion for our customers,” said Mr. Kahn. Mr. Kahn added, “Separately, our Board of Directors is conducting a thorough capital planning review and developing a strategic plan to enhance shareholder value. As previously disclosed, we intend to communicate the details of these efforts and progress with our operating initiatives to our shareholders during our quarterly earnings call on August 21st.” The Company currently estimates a second quarter loss per diluted share of between $0.09 and $0.10. This includes the after-tax effect of estimated severance costs for the Company's former CEO of $0.02 per diluted share and estimated non-cash asset impairment charges of $0.01 per diluted share. Before the impact of the CEO severance and asset impairment charges, the Company expects a second quarter loss per diluted share of between $0.06 and $0.07, which is unchanged from the Company's recently updated guidance range. About The Wet Seal, Inc. Headquartered in Foothill Ranch, California, The Wet Seal, Inc. is a leading specialty retailer of fashionable and contemporary apparel and accessory items. As of July 28, 2012, the Company operated a total of 550 stores in 47 states and Puerto Rico, including 468 Wet Seal stores and 82 Arden B stores. The Company's products can also be purchased online at www.wetseal.com or www.ardenb.com. For more Company information, visit www.wetsealinc.com. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This news release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements that relate to the Company's estimated second quarter earnings per share and inventory levels, near-term merchandising actions and planned future communications, as well as the intent, belief, plans or expectations of the Company or its management. All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors beyond the Company's control. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to, those described in the Company's filings with the Securities and Exchange Commission. This news release contains results reflecting partial year data and non-fiscal data that may not be indicative of results for similar future periods or for the full year. The Company will not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. The Wet Seal, Inc.Steven H. Benrubi, 949-699-3947