Teen clothing retailer Wet Seal abruptly closed 338 stores this week, laying off about 3,700 employees on short notice.
In Minnesota, stores closed Tuesday in Rosedale, Southdale, Maplewood Mall, Burnsville Center, Crossroads Center in St. Cloud, Miller Hill Mall in Duluth and Apache Mall in Rochester, according to store employees in the Rosedale and St. Cloud stores.
Stores in Mall of America and Shoppes at Arbor Lakes in Maple Grove will remain open.
The California-based company will have 173 stores in 42 states and an online business after the closings, according to a statement on its website. The closings will result in pretax charges of about $6 million for inventory write-off, asset impairments and employee terminations, it said.
Wet Seal Chief Executive Ed Thomas, who returned to the firm in September, said the closings were "very difficult" to do.
"We are doing everything we can to protect the interests of all of our stakeholders, including our employees," Thomas said in a statement. "We acknowledge and sympathize with how hard these recent events have been on our employees."
The apparel company, which focuses on young women, has tried to cut costs after losing more than $150 million during the past two years.
Many teen clothing retailers have struggled in recent years, including Abercrombie & Fitch and American Eagle. Delia's and Deb stores filed for bankruptcy protection last year. Delia's announced that it will shut down. However, H&M, Forever 21 and Zara have performed better with inexpensive fast fashion.
"It's a zero-sum game for teen apparel retailers," said Dave Brennan, co-director of the University of St. Thomas Institute for Retailing Excellence. "Teens have limited resources, and lately they're spending more of their money on gadgets than clothes."
Jeremy Hamblin, an analyst at Dougherty & Co. in Minneapolis, also thinks the sector is in trouble. "I think there's probably a pretty serious re-evaluation of the business models for these companies," he said.
Brennan said one bright spot might be the minimum wage increase that went into effect Jan. 1 in many states. That may give teens more disposable income, he said.
Bloomberg News contributed to this report.