Hip PacSun Hops to Sales Balloon With Beach, Urban Looks
By JENNIFER BELLANTONIO
Anaheim-based Pacific Sunwear of California Inc. has been cashing in on America’s fascination with hip-hop apparel and beach garb.
The teen retailer saw annual revenue grow 88.7% to $883 million through June 30, versus $468 million in 2000. That puts PacSun at No. 23 on this year’s list of the fastest-growing OC-based companies.
The company recently raised its third-quarter guidance after posting an 18.5% jump in September same-store sales, beating initial estimates.
Chief Executive Greg Weaver has steered the company’s growth. He joined PacSun back in 1987 when it had about a dozen stores. At the time, an investment group had just bought out the two founders,surfers that ran a cluster of stores in Southern California selling mostly wet suits and surfboards.
The group tapped Weaver as vice president of operations. He became chief executive in 1995.
PacSun, which carries clothing and accessories from a host of Orange County brands, including Huntington Beach-based Quiksilver Inc., Irvine-based Billabong USA and Costa Mesa-based Hurley International, now has about 840 stores in the U.S. Some 725 stores carry the PacSun name with the balance being d.e.m.o. stores, which sell hip-hop and urban clothes.
PacSun launched d.e.m.o. in 1998 to lure ethnic and urban shoppers and to tap into hip-hop apparel,the only real threat to surfwear’s dominance among teens.
The division, which posted a same-store sales increase of 24.2% in September, has outperformed PacSun stores, which posted a 17.8% jump in September same-store sales.
PacSun has ridden hip-hop’s rise to the mainstream without cannibalizing its PacSun sales, Weaver said in an August interview.
“You can put a d.e.m.o. store next to a PacSun store,and we have in 22 states,and there’s no crossover,” Weaver said.
The company has stepped up its d.e.m.o. rollout. Executives now say the chain can grow to 400 stores, up from an earlier projection of 200.
By 2007, PacSun hopes to have up to 1,400 stores across both divisions.
Girl shoppers are a big part of PacSun’s sunny picture. PacSun started carrying girls clothes about eight years ago.
Unlike other teen retailers, such as Foothill Ranch-based Wet Seal Inc., which rely on their own private-label offerings, PacSun rides on the coattails of hip brands, such as Hurley, Fox Racing and Roxy. About 35% of PacSun’s clothing sales come from its private labels for men and girls.
That tactic has helped insulate the company from fickle teen-age tastes.
