Pacific Sunwear Slows Expansion, Boosts Girls, Revamps Men’s Lines
By JENNIFER BELLANTONIO
In a sense, Pacific Sunwear of California Inc. has been caught with its pants down.
“For two years we’ve had difficulties with anything pertaining to the men’s bottom business at PacSun,” Chief Executive Greg Weaver told a group of stock analysts and investment bankers who recently gathered at The Block of Orange to learn about the teen market. “(We have a) great top story, great shoe story, great girls’ story and a bad pants business.”
“Because men’s is still such a big part of the pie, it dragged the company down,” Weaver said, noting PacSun’s same-store sales were off 2.6% for 2001, the company’s first annual decline in many years.
“It’s painful, to say the least,” Weaver said.
The struggles with the men’s lines made a bad retail year,compounded by the aftermath of the Sept. 11 attacks,worse for the Anaheim-based company.
As a result, Weaver said, Pacific Sunwear will open fewer new stores this year, is putting more resources into its growing girls’ business and is retrenching the lagging men’s bottoms business.
Weaver said that for the five-week period ended Jan. 6, PacSun’s accessory sales were up 9%, girls’ sales jumped nearly 10% and footwear saw mid-teen increases. But the men’s business was down 4%,and that was the best it had been in all 2001. Overall, the company’s same-store sales were up 4.1% for the five-week period ended Jan. 6 vs. the year-ago period.
Weaver said the December results were encouraging, but could’ve been much better. Even if men’s sales had managed to stay flat, he said, it would have been a “real driver.”
To jumpstart the sector, PacSun plans to reintroduce wide-leg pants, a trend Weaver said the retailer could’ve pulled away from too quickly.
“We’re going to hold onto the basics and we’re going to layer this in,” he said.
PacSun also plans to a carry additional silhouettes in men’s shorts, which have been criticized as being “too conservative.” Weaver said the new look is longer.
In the meantime, the company plans to open 75 new stores this year and expand 30, down from about 125 to 130 new stores annually the past couple of years. Pacific Sunwear now has 719 stores.
“There’s a lot of things we’d like to do better here,” he said. “We’re looking to maximize our sales per square foot and maximize our comps.”
One reason the company is expanding stores,and leasing larger ones,is to grow its girls’ business. Weaver said fashion for the sector has evolved from being “tom-boy” driven to more “sophisticated and fitted.”
“We took baby steps in launching girls,” Weaver said, explaining that PacSun was “over-conservative” and concerned it would alienate the men’s business.
Now, the company’s being more aggressive, even taking a second look at its marketing, which has been male-dominated with a concentration on extreme sports.
“There’s no manual on how to run (719) stores,” Weaver said. “There’s some inevitable learning curves that come your way.”
The conference at The Block was hosted by Connecticut-based Integrated Corporate Relations Inc., which handles investor relations for companies such as Santa Fe Springs-based Vans Inc. and Huntington Beach-based Quiksilver Inc., which were both in attendance. Others featured at the forum included Foothill Ranch-based Wet Seal Inc. and Irvine-based Ocean Pacific Apparel Corp.
