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PacSun Boss Taps Lessons from Vans, Dad

The clothing business is in Gary Schoen-feld’s blood.

The chief executive of Anaheim-based Pacific Sunwear of California Inc. is third in a line of clothing guys. His grandfather started a necktie business where his dad Walter Schoenfeld worked before going on to start Britannia Sportswear.

The Seattle-area maker of Britannia jeans reached $300 million in yearly sales by the time Levi Strauss & Co. bought it in the early 1980s.

A decade later, Gary Schoenfeld coaxed his dad out of retirement to run Vans Inc., a maker of skateboarding shoes and clothes, then based in Orange.

At the time, Gary Schoenfeld was with Foster City private equity investor McCown De Leeuw & Co., which bought Vans in 1988.

Walter Schoenfeld led a turnaround at Vans before handing the reins over to his son in 1996, when Gary Schoenfeld started on his own revival of Vans, leading to 2004’s sale to VF Corp.

The younger Schoenfeld, who went to the University of California, Los Angeles, and got his business degree from Stanford University, described his dad as a “great business mind” who taught him to trust his instincts.

He now needs good instincts and turnaround savvy at Pacific Sunwear, which runs the PacSun chain of mall stores selling clothes inspired by surfing, skateboarding and snowboarding.

For the better part of two years, Pacific Sunwear has been in a funk that seems to be getting worse before it gets better.

In November, Schoenfeld warned Wall Street to brace for a bigger-than-expected loss for the three months through January as sluggish sales raised the prospect of more profit-killing price cuts and blowouts of unsold clothes.

The earnings bomb sent Pacific Sunwear’s stock plunging and came six months into the job for Schoenfeld, who joined in June.

Source of Troubles

Part of the challenge for Pacific Sunwear and its 900 stores lies in the lingering retail downturn, the worst in recent memory.

But part of the company’s troubles are its own as Pacific Sunwear has seen shoppers defect to a host of rivals, including Zumiez Inc. of the Seattle area, City of Industry-based Hot Topic Inc., Philadelphia-based Urban Outfit-ters Inc. and Los Angeles-based Forever 21 Inc.

Pacific Sunwear, which has yearly sales of $1 billion, was “anxious for leadership” when he arrived, Schoenfeld said.

He’s been big on communication. On day one, he gave a presentation to executives, getting them on board with changes.

On his second day, Schoenfeld gave the presentation to the entire team in Anaheim. He followed that with updates at 30 days and—“following Obama’s lead,” he said—at 100 days.

“We need to change,” he said. “Good leaders stay cognizant of the whole mission.”

Schoenfeld has made several strategic and operational switches, reversing many of the policies of former chief executive Sally Frame Kasaks, who remains as a director.

His big goal: bring back authenticity to PacSun stores. What Schoenfeld calls heritage brands—clothes from locals Volcom, Quiksil-ver Inc., Hurley International LLC and Billabong USA—are being played up.

Pacific Sunwear also is working more with clothing makers, hoping to piggyback on their marketing and sponsorship of surfers, skaters and snowboarders.

Schoenfeld said he’s seen “a great amount of support” from local industry executives.

There’s a natural camaraderie given his days running Vans, now based in Cypress.

“Having been on their side of the table it is easier to have a similar vision and appreciation,” he said.

Schoenfeld said he still occasionally surfs. He likes snow and water skiing.

His days start early. By 6:30 a.m. he’s on the phone. By 7 a.m. he’s on the road. His travel schedule is reasonable, he said.

Fixing Pacific Sunwear “can’t be done if I’m on airplanes all the time,” he said.

Schoenfeld also has sought to boost customer service at stores, bring in more shoes and improve the mix of clothes sold. He also wants to get away from the heavy discounting that’s reigned at Pacific Sunwear for the past year. But that’s as much in the hands of market conditions and moves by rivals.

Teen Input

The company is big on surveying teens at malls, a tactic honed by Greg Weaver, Pacific Sunwear’s formative chief executive who left in 2006.

“This is a business where you have to be out with the customer,” Schoenfeld said.

A father of three, Schoenfeld said his kids shop at PacSun. His eldest even worked at one during the summer. His daughter is anxious for her turn, he said.

Targeting fickle teens is tough. With guys, brands tend to dominate how they shop, according to Schoenfeld.

Girls and young women are driven by a mix of fashion and price, he said.

There are a lot of lessons from Vans for Pacific Sunwear, Schoenfeld said.

Running Vans taught him about understanding customers, he said. Putting together a cohesive, experienced and passionate management team also is key, he said.

Vans also provided “the benefit of knowing just how strong a connection the action sports brands have with teens across the country,” he said.

Lastly, Schoenfeld said Vans taught him “we can’t make it all happen overnight.”

Gomez is a former Business Journal editor who now freelances from Long Beach.

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