Irvine-Based Wet Seal Chain Takes a Dive

IRVINE — Wet Seal, which in 1996 managed to avoid market forces that tripped up many other retail stocks, saw its stock price plummet during the first two days of trading in the New Year.

Shares of the Irvine-based retail women’s wear chain, which ended the year at $21.375, tumbled to $18.125 on Thursday after a negative report by a Wall Street investment firm, and fell again on Friday to $14.75.

New York-based Ladenburg Thalmann & Co. reported that Wet Seal stores open for more than a year had failed to reach anticipated sales levels during November and December. The investment firm cautioned that soft sales in January would jeopardize Wet Seal’s chances of meeting analysts’ earnings estimates of 45 cents per share for the quarter ending Jan. 31.

Wall Street has been quick to punish profitable retail and apparel companies that fail to meet analysts’ rosy expectations. During 1996, Mossimo Inc., Oakley Inc. and Quiksilver each saw their stock prices drop when sales growth slowed.