Shares in Wet Seal Inc plunged as much as 18 percent today after the struggling teen clothing retailer sacked chief executive Susan McGalla due to falling sales, Reuters reported.
California-based Wet Seal said in a statement that the company’s president, Ken Seipel, and chief financial officer, Steve Benrubi, would steer the clothing chain while it searched for a new CEO.
The announcement came as Wet Seal downgraded its sales guidance for the current quarter as it struggles to attract young shoppers whose parents are tightening their belts due to the economic downturn.
According to the Wall Street Journal, Wet Seal expects same-store sales to fall 10-11 percent in the three months to the end of July – the lower end of its earlier guidance – after a sharp fall in sales in stores opened at least a year in the third week of this month.
Benrubi told the Associated Press that the decision to fire McGalla was based on the financial performance of the company and not a racial discrimination lawsuit filed by three former managers, who have accused Wet Seal of favoring white workers over their black colleagues.
Wet Seal shares were down nearly 11 percent at $2.63 in afternoon trading in New York.
More from GlobalPost: Nexen shares soar after CNOOC makes $15.1BN takeover bid