Though Wet Seal tested this concept in its other chains during 1997 and 1998, the first Arden B. didn't open until last November. Wet Seal plans to open 108 total stores this year, including 78 in former Britches locations. I read that to mean that Arden B.'s results won't figure significantly into the comp-store sales figure until fiscal year 2001. After all, the company had cash and investments to back nearly half the firm's market capitalization. Stock buyback announcements call attention to potential values.
Actual buybacks underscore the point.
The first rule of investing in fashion-oriented apparel retailers is to make sure the balance sheet is solid. Wet Seal's definitely is. While Q1 EPS benefited from the share buyback, the company lost some interest income versus last year as a result. However, there are a lot of cross currents in here. Meanwhile, the company is spending on training to get its new Arden B. personnel up to speed.