Wet Seal has filed for bankruptcy and plans to close two-thirds of its stores in 2015. Why are stores like Delia's going out of business? A CEO and chief equities strategist at Belus Capital Advisors explains the stiff competition in the teen clothing store industry.

ABC News reports The Wet Seal Inc. announced Friday that it has filed for Chapter 11 bankruptcy protection in an attempt to stay afloat. The chain said that it was closing 338 stores, or about two-thirds of its total.

Wet Seal will keeping its doors open by operating under a $20 million financing agreement from an investment bank, CNN Money reports. Wet Seal is going to have a very difficult 2015 amid heavy competitive pressures; the teen retailer suffered a net loss of $36 million during the third quarter as sales plunged nearly 15%.

The news comes in the wake of fellow teen clothing retailers Delia's Inc. and Deb Stores filing for Chapter 11 bankruptcy in December after failing to find a buyer. The parent of Deb Shops, which is based in Philadelphia, said earlier this month that it would begin selling off inventory and shuttering some of its nearly 300 locations, Fortune reports.

Why does there seem to be a recent pattern of teen clothing stores going out of business and filing for bankruptcy?

According to Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors, Wet Seal failed for two reasons: "A company that failed to stay in tune with their customers and new rivals like H&M that were able to get cooler merchandise to the stores quicker and with slightly better quality than Wet Seal," he told AP.

Bigger retailers like J.C. Penney Co. and Kohl's Corp. also "upped their games" in teen girls clothing, Sozzi said.'

AP added that Wet Seal and other chains are being hurt by stores like H&M and Forever 21, which tempt young people with "fast-changing selections of low-priced fashion."

"That whole industry has been shaken to its core by the fast fashion guys" like Forever 21 and H&M, added Paula Rosenblum, a retail analyst at RSR Research, CNN Money reports.

These faster competitors "are really good at doing cool and doing cheap," she said.

Wet Seal began in 1962 as a bikini shack in Newport Beach, California. It was acquired by Canadian retailer Suzy Shier in 1984 and went public in 1990. Today, the retailer sells clothing, shoes and accessories aimed at teenage girls.