Is PacSun Going Out Of Business In 2024? Is PacSun still around?

In recent times, lots of stores have had a tough time because people are shopping more online, and the way we buy things has changed. PacSun, a popular shop in the United States, is also facing some problems, and people are wondering if it might go out of business. 

In this blog, we’ll talk about what’s happening with PacSun right now, look at the difficulties it’s dealing with, and figure out if this store we all like will keep going or not.

Is PacSun Going Out Of Business In 2024? PacSun has closed some stores to save money and work more efficiently, which is common in the retail world. Even though closing stores might seem like a problem, it’s a regular thing stores do to use their resources better.

In April 2016, the surf and skate clothing company PacSun filed for bankruptcy. This happened due to changing teen fashion trends and long-term debt problems. PacSun was bought by San Francisco-based private equity firm Golden Gate Capital shortly after it emerged from bankruptcy. It ultimately reduced the number of its stores and a significant portion of its debts in a debt-for-equity exchange.

The business had 325 locations across all 50 states and Puerto Rico as of 2022. Now, PacSun is focusing more on selling things online because a lot of people like to shop on the internet. You can find a bunch of stuff on their website to buy.

PacSun is also changing its image and trying to be more eco-friendly. This means they want to sell things that are good for the environment, which is important to people who care about that.

Looking at PacSun’s money situation, it’s up and down. They are working on reducing how much money they owe, which is a good step to stay strong and keep going for a long time.

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About PacSun

PacSun, a clothing brand in the United States, is all about California’s cool lifestyle. It joined forces with another brand called Eddie Bauer in 2018, and together they formed PSEB. The person in charge of both PacSun and Eddie Bauer is Mike Egeck. PacSun doesn’t have the best customer ratings, and it has faced money troubles, filing for bankruptcy three times. They used to have a lot of stores, but now there are way fewer.

If you’re thinking of working at PacSun, you need to be at least 16 years old to apply as a sales associate. PacSun often uses not-so-expensive materials for their clothes to save money. This usually means the clothes might not last very long, following a quick fashion style where things are made to be replaced easily.

How Did PacSun Overcome Challenges to Stay in Business?

PacSun, a store that sells clothes, had some tough times like American Apparel. They faced problems because of fast fashion trends and fewer people visiting physical stores. PacSun used to focus a lot on a specific style, but that didn’t help them. A fashion expert named Betty Chen even said that people weren’t as interested in surf and skate styles.

People’s tastes in style were changing, and they were more into basketball, sports, hip-hop, and streetwear. Even though PacSun tried to sell different things, it didn’t work well. They also stopped selling shoes, which wasn’t a good move. High bills and debts were causing big money problems for PacSun.

To fix things, PacSun worked with Wells Fargo and Golden Gate Capital. They made a deal to change their debts into something else. Compared to other stores like American Apparel, PacSun only had to close a few shops. They also made better deals for renting spaces in malls, where they put their stores.

A person named Josh Olshansky from Golden Gate Capital said PacSun went beyond its old ways and added new brands to show the ‘California style.’ Another store called Eddie Bauer, also saved by Golden Gate Capital, joined PacSun in 2018.

PacSun went through a tough process called Chapter 11 but did better than other stores that had money problems. Some stores, like Sports Authority, had to sell everything, and Aeropostale only kept a few shops open.

When PacSun had money troubles in April, they had about 590 stores. Since then, they closed 10 to 20 stores but found cheaper places to keep the others open.

Surprisingly, PacSun did well in 2020, even with COVID-19 problems. They even had more job openings and increased the number of people working in their stores by 28% since January 2020.

Why Did PacSun Have to Make Big Changes?

Unlike many other stores that had problems and had to close, PacSun managed to come back after facing bankruptcy. They did this by making some important decisions and working with a company called Golden Gate Capital.

Before they asked for help, PacSun closed a lot of their stores and changed how they planned to grow. They gave away all their shares to Golden Gate Capital, who lent them money. This happened in September 2020, and Golden Gate Capital decided to invest $20 million in PacSun. They also agreed to help PacSun by reducing the amount of money they owed from $88 million to about $30 million. The rest of the money, $88 million, will be paid by PacSun to the people they owed.

Back in 2016, PacSun had 593 stores when they had to declare bankruptcy. After that, they made deals with the owners of malls to pay less for the spaces where their stores were. They also closed about 10 stores, and by 2020, they had 583 stores in all 50 states and Puerto Rico.

PacSun was not doing well before they asked for help in 2016. They had been losing money since 2008 and were having a hard time competing with other stores that sold cheap and trendy clothes, like Forever 21 and H&M. These stores were better at keeping up with the latest fashion trends. Younger people, especially millennials, were choosing to spend their money on experiences instead of buying new clothes, according to PacSun and other similar stores.

Can PacSun Make a Comeback?

PacSun wants to get better financially after not doing well for three years. They’re planning to close around 200 of their not-so-good stores all over the country. Even though they keep losing money, they just got $160 million to help them make changes.

The person in charge, Gary Schoenfeld, says these changes will make PacSun a top store again. After this news, the value of PacSun shares went up by 47%.

PacSun got the money from two places: $100 million from Wells Fargo and $60 million from a company called Golden Gate Capital. This company now has two seats on PacSun’s board.

People who watch stores say that PacSun has been having a tough time because their clothes haven’t been as popular as other stores. They are trying to fix this and become more liked by changing what they sell.

Even though PacSun is closing some stores, they haven’t said which ones or how many jobs will be lost. But they say their business in California is getting better.

Who Are PacSun’s Competitors?

PacSun, or Pacific Sunwear of California, is a popular store for cool and casual clothes. If you want to check out other stores like it, here are some good options:

• Tillys: Tillys is all about young people, with clothes and accessories inspired by California skate and surf culture. They have brands like Dr. Martens, Billabong, and Vans.

• Forever 21: Forever 21 is a close competitor to PacSun, targeting young people with stylish and trendy clothes. They sell clothes under their label.

• ASOS: ASOS, from the UK, offers their clothes along with top brands. They have a European and fashionable style, perfect for unique looks.

• Urban Outfitters: Urban Outfitters is known for modern and hip styles, offering not just clothes but also lifestyle items, home decor, electronics, and workout gear.

• Aeropostale: Aeropostale has affordable and trendy clothes for young shoppers, often providing student discounts.

• American Eagle Outfitters: American Eagle is another option for comfortable and casual wear, especially popular for their denim and basics.

• Free People: Free People offers fashion with a bohemian touch, appealing to those who love eclectic styles.

• Zaful: Zaful is great for affordable and trendy clothing, especially loved by online shoppers.

Remember, everyone has different fashion tastes, so explore these options to find the one that fits your style!

The Final Takeaway

In 2024, PacSun, also called Pacific Sunwear of California, is getting better after having money problems before. Even though they had to say they couldn’t pay their debts in 2016, PacSun is doing things to make it right. They closed some of their stores and changed how they do business. They got help from a company called Golden Gate Capital, and that made a big difference. 

PacSun is now focusing more on selling things online and being better for the environment. They are also doing well financially and making smart decisions to keep up with what people like. Even though there are still challenges, PacSun is working hard to be successful and stay important in the world of shopping.