Greg Weaver knew he was headed for burnout.
So he set a goal for himself: By age 50, the chief executive of Anaheim-based teen retailer Pacific Sunwear of California Inc. planned to step back from his high-pressured job in favor of the slow life.
Weaver, who turned 50 in January, is closing in on his goal.
Last week Weaver said he plans to pass the reins to Seth Johnson, a former executive at New Albany, Ohio-based rival Abercrombie & Fitch Co.
Johnson, also 50, is set to become PacSun’s chief operating officer on Nov. 1 and chief executive in April.
Weaver plans to remain in the company as executive chairman and oversee new business, such as acquisitions or launches.
“I think 50 is a transitional time,” Weaver said. “I want more free time. I want to get home at a reasonable time. I’ve never taken more than an eight-day vacation.”
“I am the reason this is happening,” he said of his stepping back. “No one suggested it to me.”
Weaver, who’s worked at PacSun for 17 years, said he’d been hunting for a replacement during the past two years.
He said he wanted to do things “the right way” and not just up and leave the company that had made him an estimated fortune in the $80 million to $100 million range.
“I couldn’t be one of those ego maniacs that would like to see the business fall apart” when he stepped back, Weaver said.
Four months ago, Weaver found his man. It was Johnson, former chief operating officer at Abercrombie, one of PacSun’s biggest competitors.
Johnson, who spent 12 years at the clothes chain, had eyed Abercrombie’s top slot. But its chief executive, Michael Jeffries, wasn’t going anywhere. So Johnson announced his departure during summer.
During Johnson’s last days at Abercrombie, Weaver rang him up.
“He didn’t expect a call from me,” Weaver said. “(I asked), ‘Would you ever consider coming in and running a company at this point?'”
The two met for dinner in New York and chatted non-stop for three and a half hours, Weaver said.
“We never shut up,” he said. “We had so much in common.”
Johnson, a seasoned retailer who is liked by Wall Street, is a perfect fit for PacSun, Weaver said. He described him as “consistent and productive” and in tune with teens, “our target customer.”
Still, Johnson has some big shoes to fill.
Weaver led PacSun on a tear during the past several years.
The Patterson, N.J., native joined the company in 1987 after a 13-year stint at Jaeger Sportswear Ltd. At the time, PacSun was a small chain of a dozen stores. 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 when it posted $85 million in annual sales.
PacSun, which now counts about 970 stores and more than 12,000 workers, saw sales jump 23% to $1 billion last year. Sales are on track to meet Wall Street expectations of $1.2 billion this year.
The company consistently has posted growth in same-store sales, even as other retailers struggled in the past few years.
Weaver’s “been instrumental in getting the company where it is today,” said Jeff Van Sinderen, an analyst at B. Riley & Co. “He’s built one of the most recognizable youth brands.”
Tapping OC Surfwear
PacSun is best known for selling surfwear,beach and other clothes from Orange County designers such as Huntington Beach-based Quiksilver Inc., Costa Mesa’s Volcom and Irvine-based Billabong USA. PacSun also sells its own clothes under the Tilt, Bullhead and Kirra labels.
PacSun stores make up three quarters of the company’s total. The rest are d.e.m.o. shops, PacSun’s smaller chain, which sells urban, hip hop inspired clothes from Phat Farm, Sean John and Shady Ltd., among other brands.
The division was a chancy bet for Weaver that paid off.
He and PacSun President Tim Harmon launched d.e.m.o. in 1998 on a shoestring budget. They took a lot of heat from analysts, who were doubtful an OC-based retailer big in surf and skate clothes could nail selling urban garb rooted in New York’s street culture.
After working out some kinks, the division took off. Sales at d.e.m.o. stores last year jumped 21%, outpacing PacSun’s overall 12.3% gain.
Weaver, who describes himself as an “information junkie,” has had a hands-on role.
He jet sets around the country, visiting stores, holding teen panels and talking to managers. He said he has “signed every lease” and “approved every real estate investment.”
“PacSun has been my baby,” he said.
As a result, many analysts and PacSun workers were blindsided by Weaver’s move. The stock took a hit and was down about 6% on the news. The company counted a market value of $1.6 billion last week.
“I did surprise a lot of people,” Weaver said. “I don’t think people expected this.”
B. Riley’s Van Sinderen was one.
“I’m a little bit disappointed that Greg is going to have a less active operational role,” Van Sinderen said. “During his tenure, the company has performed extraordinarily well. They’ve been putting out very strong numbers on top of very strong numbers, which is unusual.”
In September, PacSun posted a 9.8% jump in same-store sales, outpacing analysts’ estimates of an 8.8% gain. Last year PacSun reported an 18.5% jump in September same-store sales.
In his new role, Weaver said he plans to help PacSun grow even more. The company expects to hit 1,400 retail stores by 2007.
But that’s only part of the picture, according to Weaver, who was the Business Journal’s Businessperson of the Year for 2003.
PacSun has $140 million in cash and will be generating more, which it should put to use, Weaver said.
Consequently, PacSun plans to launch or buy “one or two more concepts over the next three to five years,” he said.
“I can’t run a 1,000-store chain and figure out our next concepts or acquisitions,” Weaver said. “It doesn’t work that way.”
Weaver said workers were “appeased” when they heard he’d still have an active role, though he plans to cut his workload down to two or three days a week.
“This is an evolution,” Weaver said he told workers. “It’s not a bad thing.”
Analyst Elizabeth Pierce at Sanders Morris Harris likes the move.
She said Weaver can focus on the “next leg of the growth” while Johnson becomes “more involved in day-to-day” operations.
Knows Teen Apparel
“Seth has a lot of perspective in the teen space and specialty retail,” she said. “He’s highly regarded at Abercrombie.”
There could be some hurdles.
One of Abercrombie’s hottest units is Hollister Co., surf-inspired retail stores that sell garb similar to OC’s surf brands at a cheaper price.
Hollister is “enemy No. 1” to many OC surf brands, said Mitch Kummetz, analyst at D.A. Davidson & Co.
It’s “interesting and ironic” that Johnson now is about to run PacSun, the biggest retailer for some of these same brands, Kummetz said.
“What that means I don’t know,” he said.
PacSun has made some other executive switches of late.
Chief Financial Officer Carl Womack recently retired after 18 years with the company. Weaver said he plans to name Womack’s replacement this week.
The company also hired a new division president for PacSun and plans to name one for d.e.m.o. in early December.
In the meantime, Weaver, who lives in Cowan Heights, said he plans to stay on for at least a few years. He may consider sitting on other companies’ boards, which he hasn’t had time to do in the past.
“I’ll never not do something,” he said. “It affords me to have a little bit more time.”
