NEW YORK (AP) — Versa Capital Management said that it is the winning bidder in the auction of troubled teen clothing retailer Wet Seal, which filed for Chapter 11 bankruptcy two months ago.
Versa's bid will be presented Wednesday in the United States Bankruptcy Court for the District of Delaware for approval.
Versa is a private equity firm with a portfolio that includes restaurants such as Black Angus Steakhouses and retailers including Avenue Stores and Vestis.
"We believe our agreement with Versa provides the best possible outcome for our creditors, employees, customers and other constituents," Wet Seal CEO Ed Thomas said in a statement. "We are focused on executing an orderly emergence from bankruptcy court supervision and collaborating with Versa to improve the operational and financial performance of the business."
In January, Wet Seal abruptly closed two-thirds of its stores and filed for bankruptcy a week later. The company and many of its peers, including Delia's Inc. and Deb Stores, have faced building competitive pressure from stores like H&M and Forever 21 that are wooing young people with fast-changing selections of low-priced fashion.
Before the bankruptcy filing, Foothill, Ranch, California-based Wet Seal had been dealing with a series of management changes amid a restructuring plan in 2013. That followed a proxy battle in 2012 with an unhappy investment group.
Wet Seal had estimated its assets to be between $10 million and $50 million, according to its bankruptcy filing, with liabilities between $100 million and $500 million.