Page 75 of 76 Pages


                         [THE WET SEAL, INC. LETTERHEAD]



                                             August 25, 1997


To Our Stockholders:

               On August 19, 1997, the Board of Directors of The Wet Seal,  Inc.
(the  "Company")  adopted a Shareholder  Rights Plan. As part of that Plan,  the
Board declared a dividend  distribution  of one Class A Preferred Stock Purchase
Right on each  outstanding  share of the Company's  Class A Common Stock and one
Class  B  Preferred  Stock  Purchase  Right  (together,  the  "Rights")  on each
outstanding  share of the Company's  Class B Common  Stock.  A Summary of Rights
explaining the terms of the Rights is enclosed herewith.

               The Rights  contain  provisions  that help  protect  stockholders
against  unsolicited  attempts to acquire the Company  which  unfairly  pressure
stockholders,  which result in the unequal  treatment of  stockholders  or which
deprive  stockholders  of the fair  value  for  their  shares.  Accordingly,  as
explained  in more  detail  in the  Summary  of  Rights,  the  Rights  are  only
exercisable upon the occurrence of certain  unsolicited  takeover attempts,  and
only in such event will you potentially have the right to buy additional  shares
of stock of the Company.  The Rights will  automatically  trade with the Class A
Common Stock and Class B Common Stock;  therefore,  Rights Certificates will not
be sent to you at this time.

               The action taken  increases your Board's ability to represent the
interests  of  stockholders  of  the  Company  effectively  in the  event  of an
unsolicited takeover attempt.  Currently,  the Board is not aware of any hostile
effort to  acquire  the  Company.  The  Board  considers  these  Rights to be an
appropriate means of protecting both your right to retain your equity investment
in the Company and the full value of that investment.  Many other companies have
issued rights similar to those approved by the Board.

               The  distribution  of these  Rights is not  intended to prevent a
takeover of the Company on terms  beneficial to its  stockholders  and, in fact,
will not do so. It may,  however,  deter an attempt to acquire  the Company in a
manner or on terms that the Board  determines not to be in the best interests of
its stockholders.  The Rights are designed to deal with the very serious problem
of a takeover  attempt that deprives the Company's Board and its stockholders of
any real  opportunity  to determine the destiny of the Company.  The Rights also





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August 20, 1997
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are intended to protect the Company and its stockholders against unfair takeover
tactics which often unfairly pressure  stockholders to sell their investments at
less than full value.

               The  Rights  may be  redeemed  by the  Company at $0.01 per Right
prior to the close of business on the tenth day after a public announcement that
beneficial  ownership  of 12% or more of the  Company's  voting  stock  has been
accumulated by a single acquiror or group (with certain  exceptions),  under the
circumstance  set forth in the  Rights  Agreement.  The  Board may also,  in its
discretion,  extend the  period for  redemption  in  accordance  with the Rights
Agreement. Thus, the Rights should not interfere with negotiated merger or other
business combination approved by the Board.

               Issuance of the Rights  does not in any way weaken the  financial
strength of the Company or interfere with its business  plans.  The issuances of
the Rights has no present dilutive effect, will not affect reported earnings per
share,  is not taxable to the Company or to you under current federal income tax
law, and will not change the way in which the Company's shares of Class A Common
Stock or  Class B Common  Stock  may be  traded.  If the  Rights  should  become
exercisable,   stockholders,  depending  on  then  existing  circumstances,  may
recognize taxable income.

               The Board was aware when it acted that some people have  advanced
arguments  that  securities  of  the  sort  we  are  issuing  deter   legitimate
acquisition proposals.  The Board carefully considered those views and concluded
that the arguments are speculative and unconvincing and certainly do not justify
leaving  stockholders with less effective protection against unfair treatment by
an acquiror who, after all, would be seeking its own advantage,  not yours.  The
Board believes that these Rights  represent a sound,  reasonable and appropriate
means of  addressing  the complex  issues of  corporate  policy  developed  as a
response to the threat of coercive takeovers.

               In  declaring  the  Rights   dividend,   we  have  expressed  our
confidence  in The Wet  Seal's  future and we  believe  we have  increased  your
ability to participate in that future.

                                             Sincerely,



                                             Ed Thomas
                                             President and 
                                             Chief Operating Officer