Pacific Sunwear of California Inc. files for Chapter 11 bankruptcy
8 April 2016 Entertainment News
Nathan Andrada – Fourth Estate Contributor
Los Angeles, CA, United States (4E) – Pacific Sunwear of California Inc. became the latest activewear company in the state to file for Chapter 11 bankruptcy protection, as the beachy teen retailer struggles to adjust to changing fashion trends.
The Anaheim-based company said it will use its time in court to look for a buyer or be taken over by affiliates of its senior lender Golden Gate Capital, a private equity firm.
The company seeks to emerge as privately owned after the reorganization plan is implemented through the Chapter 11 process, PacSun said.
PacSun Chief Executive Gary H. Schoenfeld said past managerial mistakes should be blamed for the company's current troubles. Two failed expansion plans did not help the company to keep up with the changing preferences in youth-oriented fashions as well as with the intensifying competition.
The retailer employs around 2,000 full-time workers across 593 stores in the U.S. and Puerto Rico, PacSun said in its bankruptcy filing.
PacSun might have to face a complete shutdown if it doesn't restructure. In the fourth quarter, PacSun recorded a 0.2 percent rise in same-store sales and a $ 10mn net loss.