Wet Seal became the fourth US apparel retailer to file for bankruptcy in two months as the sector struggles with growing competition and lower spending by teen shoppers.

The company said its shift away from fast-fashion clothing, unprofitable ventures and a liquidity crunch due to weak sales and changes in vendor credit agreements led to the bankruptcy.

Several teen apparel retailers have been struggling as customers switch to fast-fashion brands such as H&M, Forever 21 and Inditex's Zara and online retailers such as Amazon, who offer deep discounts.

Deb Shops filed for bankruptcy on December 4, followed a day after by Delia's. Mall-based apparel retailer Body Central Corporation also shut shop this month.

Wet Seal, which sells apparel and accessories for teen girls and young women, laid off 3,700 employees and closed 338 stores last week. It had 7,413 employees a year ago.

Affected employees filed a class-action lawsuit on Thursday, accusing Wet Seal of violating the Worker Adjustment and Retraining Notification that requires employers to warn workers of impending mass layoffs.

'Despite strong evidence that Wet Seal was in steep decline, it continued to keep its employees uninformed ... employees were told not to look for other jobs and that the stores were simply remodelling,' the lawsuit said.

The plaintiffs sought 60 days pay and benefits.

Wet Seal and its legal attorneys were not immediately available for comment.

The company, which reported slowing sales growth for the past five quarters, warned last month that it may file for bankruptcy protection if it failed to address liquidity issues.

The company said it received $20 million in debtor-in-possession financing from B Riley Financial. It intends to reorganise its business around e-commerce and its remaining 173 stores.

Wet Seal, founded in 1962, listed assets of $10 to $50 million and liabilities of $100 to $500 million in its Chapter 11 bankruptcy filing. It has hired FTI Consulting as restructuring advisor.-Reuters