Anaheim-based Pacific Sunwear of California Inc. said Tuesday it plans to close 74 stores as the retailer reported another monthly decline in same-store sales and warned about results for its recently ended quarter.
Pacific Sunwear, which runs about 1,200 mall stores, said it plans to close 74 stores in its d.e.m.o. chain, which sells urban, hip-hop style clothes. The company now operates about 225 d.e.m.o. stores, which have seen slumping sales.
“We have conducted an extensive review of our d.e.m.o. division with the objective of improving the profitability of this business,” said Sally Frame Kasaks, Pacific Sunwear’s interim chief executive.
The 74 stores to be closed generated an operating loss before taxes of $9 million for 12 months through January, Kasaks said.
“We believe that d.e.m.o. remains a viable concept,” she said. “Exiting the stores now will allow us to focus our efforts on our better performing locations, which we believe will improve our future financial results.”
The company expects to see closure-related pretax charges of $25 million to $27 million in results for the quarter through January. Results are due in coming weeks.
Pacific Sunwear said it expects earnings of $15 million to $16.7 million for the recently ended quarter. Analysts had been expecting about $32 million on average.
For January, Pacific Sunwear said it saw sales at stores open at least a year fall 7.7%, the latest in a series of monthly declines.
The company’s dominant PacSun surfwear chain saw same-store sales fall 7.3%. D.e.m.o. same-store sales fell 9.5%.
